Lindt & Sprüngli flags pricing missteps in Germany after CEO ouster

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Lindt flags Germany pricing missteps

Highlights

Lindt & Sprüngli's chairman acknowledged pricing errors in Germany led to lost demand and a share price drop of more than 25% year-to-date.
The company has already reduced some product prices and expects further flexibility once cocoa prices normalize, but maintains shares are now undervalued.
Lindt anticipates 6% to 8% growth in the Americas and Far East for 2024, while job cuts are ruled out but bonuses in the DACH region will be reduced.

Chairman outlines pricing errors and recovery steps

As reported by Reuters, Executive Chairman Ernst Tanner says Lindt & Sprüngli misjudged how customers would react when it passed on higher cocoa costs through price increases, especially in Germany. In an interview with NZZ am Sonntag, he says the company overestimated how much it could raise prices without damaging demand after cocoa prices reached historic highs from 2024 onward.

Tanner says some Lindt products clearly became too expensive for consumers in recent months, contributing to the group's struggles and a share price decline of more than 25% this year after recent outlook cuts. He adds that Lindt & Sprüngli as a whole is not in crisis and argues the company's shares are now undervalued.

The chairman says the company has already reduced some prices to help lift sales volumes and expects to gain more room for cuts once cocoa prices return to more normal levels. Tanner also rejects suggestions that he should step down, saying he still has important work to do to get the company back on track before moving to the next phase of his life.

Regional performance and workforce impact

Tanner says Lindt expects to achieve its growth targets of 6% to 8% this year in the Americas and the Far East, indicating that weakness is not spread evenly across the business. That leaves Germany as the key market where pricing execution has weighed most heavily on performance.

He says there will be no group-wide job cuts and that the company still wants to grow, despite pressure on results. At the same time, he says thrift is necessary and bonuses in the Germany-Switzerland-Austria region will be affected because targets have been missed.

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