Barry Callebaut Shares Plunge as it Cuts Guidance Again
Shares fell by as much as 10% in early Zurich trading, the most since April.
The firm now sees a 7% decline in full-year sales volume, compared with a mid single-digit decrease forecast in April, according to a statement on Thursday. It posted revenue of CHF 10.95 billion ($13.8 billion), and a 6.3% decrease in sales volume for the first nine months of its fiscal year, saying the global chocolate market 'saw its largest decline in a decade in the third quarter'.
It also expects a mid to high single-digit increase in recurring earnings before interest and taxes in local currencies for the year 2024/25, compared with a double-digit increase expected before.
As inflationary pressures squeeze consumer budgets and demand, Barry Callebaut has seen sales to chocolate-manufacturing clients decline. Unlike consumer brands like Swiss Lindt & Spruengli AG, the firm has had difficulties passing on higher cocoa prices to customers, due to its lack of premium brand pricing power.
While cocoa bean prices are down more than 30% this year and higher production is expected in the season that starts in October, chocolate-makers are still clearing expensive inventories, keeping prices elevated.
Uncertainty around potential tariffs by the US is also pressuring demand. Barry Callebaut's global chocolate business saw a decline of 12.3% in third-quarter sales volume in North America.
'Overall the weak volumes in Q3 lowers the visibility on when a return to volumes growth is likely,' JPMorgan Chase & Co analyst Edward Hockin wrote in a note, adding he sees 'risks to next year consensus volumes expectations.'
Barry Callebaut has seen its share price plunge more than 30% since 2024, when cocoa prices began surging due to poor harvests in West Africa and other growing regions. The firm is undergoing restructuring under Chief Executive Officer Peter Feld, who is trying to edge the company closer to its business-to-business clients.
--With assistance from Allegra Catelli.
(Updates with share price decline in second paragraph, analyst comment in eighth paragraph.)
More stories like this are available on bloomberg.com
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