Lindt & Spruengli Lifts Profit in Challenging Market

ZURICH—Lindt & Spruengli AG on Tuesday reported an 11% increase in full-year profit as the Swiss chocolate maker overcame a "persistently challenging market environment" where a hot summer slackened demand for chocolate and a strong Swiss franc weighed.

Kilchberg-based Lindt said 2015 net profit increased to 380.4 million Swiss francs ($383 million) from 342.4 million francs a year earlier. The figure beat analyst expectations of 369 million francs.

The maker of Lindor chocolate balls had previously announced a 7.9% increase in annual sales to 3.65 billion francs for 2015.

Lindt said it increased sales in all its major markets, despite describing 2015 as a tough year where higher raw material prices and the elevated level of the Swiss franc were negative factors.

"First and foremost, the Swiss National Bank's decision to abandon the exchange rate floor…had noticeable consequences for the Swiss economy," said Lindt, referring to the shock decision by the SNB to scrap its long-standing limit on the value of the franc against the euro.

The decision sent the franc soaring, hurting exporters by making Swiss exports more expensive, while slowing economic growth in the Alpine country. The rise in the currency reduced Lindt's 14% sales growth in local currencies to 7.9% when measured in francs.

Ongoing concerns about unemployment and deflation and the "unsettling effects of terrorist threats" also dampened consumer sentiment, Lindt said.

"A very hot summer followed by an extremely mild start to winter both had a negative impact on chocolate consumption," added the company which is famous for its golden chocolate bunnies. "This led to sluggish demand in the overall chocolate market."

Lindt was boosted by the performance of its Russell Stover business it acquired in the U.S., which helped its North American operations increase sales by 7.9%.

Other regions also grew, while Lindt expanded its network of stores it operates around the world, with 50 new stores taking its total to 325 during 2015. It said it planned to continue its retail rollout and add up 20 to 30 new shops every year.

Write to John Revill at john.revill@wsj.com

(END) Dow Jones Newswires

March 08, 2016 03:05 ET (08:05 GMT)

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