Barry Callebaut stock plunges 13% on deep Q3 volume shortfall and lowered outlook

Investing.com -- Barry Callebaut AG’s (SIX:BARN) shares tumbled more than 13% on Thursday after the cocoa processor reported a sharper-than-expected 9.5% decline in third‑quarter volumes and revised its full‑year outlook downward. 

Global Chocolate volumes fell 6.2%, while Cocoa volumes plunged 22.6%, underscoring persistent B2B uncertainty amid its BC Next (LON:NXT) Level strategic shift.

For the first nine months of fiscal 2024–25, group sales volume slid 6.3% to 1,602,458 tonnes, from 1,710,241 tonnes a year earlier. 

Chocolate volume dipped 5.1% to 1,301,154 tonnes and Cocoa fell 11.3% to 301,304 tonnes. 

In constant‑currency terms, revenue climbed 56.7% to CHF 10.95 billion, driven by higher cocoa prices passed through to customers. 

Cocoa Products led with an 84.6% surge to CHF 3.38 billion, Food Manufacturers rose 48.8% to CHF 5.90 billion and Gourmet sales gained 38.7% to CHF 1.67 billion.

Regional volume performance was mixed. Western Europe declined 6.8%, North America 5.8% and Central and Eastern Europe 5.5%. Latin America grew 8.3%, and Asia‑Pacific, Middle East and Africa (AMEA) edged up 0.5%. 

In Q3, North American volume plunged 12.3%, hurt by soft demand, operational transitions in Mexico and tariff uncertainty. 

AMEA posted a 2.2% fall, led by China and the South Pacific, partially offset by gains in India, the Middle East and Indonesia.

The third‑quarter underperformance extended broader confectionery weakness; Nielsen data show global retail chocolate demand contracted 4.2%, the steepest drop in a decade, helping drive Barry Callebaut’s 9.5% group volume decline. 

Morgan Stanley (NYSE:MS) noted that Global Chocolate volumes continued to lag the confectionery market, mirroring underperformance in the first half.

In response, Barry Callebaut trimmed its full‑year volume forecast to a decline of around 7%, from a prior mid‑single‑digit drop, and now anticipates mid‑ to high‑single‑digit recurring EBIT growth in local currencies, down from a previous double‑digit target. 

The company warned its revised guidance implies EBIT that is flat to below consensus by up to mid‑single digits, equating to roughly a 10% cut to consensus estimates.

The firm reiterated progress on its CHF 250 million BC Next Level cost‑saving program, although 75% of savings will be delayed by 12 months due to temporary offsetting expenses. 

It opened new production sites in Canada and India, culled 3,157 SKUs, and plans further inventory reduction and financing optimization to bolster deleveraging.

Commodity trends added complexity: average cocoa prices were 43% higher year‑on‑year, peaking at £9,425 per tonne and ending at £6,453; sugar prices declined 17% globally; and dairy costs rose 1% on steady demand and tight supply.

Barry Callebaut’s Q3 miss and cautious outlook underscore the challenges of a volatile commodity environment and uneven market demand, raising questions about the pace of recovery in its core B2B segments.