Chocolate maker and cocoa processor Barry Callebaut reported lower sales volumes than expected for its first quarter on Wednesday.
The company said it was hit by delayed orders as its clients renegotiate product prices with retailers amid record high cocoa costs.
Its shares fell 4.3% by 0824 GMT to the bottom of Europe’s benchmark STOXX 600 index.
Vontobel analyst Jean-Philippe Bertschy said the company was facing a “continued challenging situation” with the soaring raw material cost set to last.
The Switzerland-based group – which supplies chocolate for Unilever’s soon-to-be-spun-off Magnum ice creams and Nestlé’s KitKat bars – said its sales volume fell 2.7% to 565,000 tonnes in the quarter that ended 30 November.
This was below analysts’ forecast of 568,000 tonnes in a company-provided consensus.
The company also expects its annual sales volume to fall below a low-single-digit percentage after previously forecasting flat cocoa sales volumes for the year.
However, it reaffirmed its target for double-digit growth in recurring operating profit on a constant currency basis.
Analysts have said the chocolate industry is in for a rough 2025, faced with unprecedented cost of the raw material that will likely prompt further price hikes, increasing costs in a teen percentage.
Analysts at Baader Helvea said the effects of the cocoa price increases were starting to show in the results.
In a note to clients, they wrote, “Maybe the category is not as volume-resilient as management wanted investors to believe.”
It added that soaring prices could make investors question long-term metrics of the business model post-transformation.
Barry Callebaut said it was issuing a bond worth 300 million Swiss francs to address the high cost and its ensured liquidity.
Read More: Lindt Sees Further Growth For 2025 As Price Hikes Combat High Cocoa Costs
