Barry Callebaut cuts 2025–2026 profit forecast amid cocoa market overcapacity, supply chain disruptions
Barry Callebaut lowers profit outlook as cocoa surplus, weak demand, and supply disruptions weigh on performance despite expected second-half volume recovery.
SWITZERLAND – Swiss chocolate manufacturer Barry Callebaut has lowered its operating profit forecast for the 2025–2026 fiscal year, citing supply chain disruptions linked to the Iran war and persistent overcapacity in the global cocoa bean market.
The Zurich-based group said it now expects its recurring earnings before interest and taxes (EBIT) to decline by a mid-teens percentage in local currencies, reversing its earlier projection of low- to mid-single-digit growth.
The revised outlook reflects mounting pressure on profitability despite expectations of improved sales volumes later in the year.
“The unique speed of the market decrease combined with a competitive overcapacity market, volume declines and supply disruption impacted EBIT performance and adjusted our profitability outlook for the year,” said CEO Hein Schumacher.
For the first half of the fiscal year, recurring EBIT fell 4.2% in local currencies to 310.9 million Swiss francs (US$398.0 million). Revenue also declined by more than 7% to 6.75 billion Swiss francs, while sales volumes dropped 6.9% year-on-year to 1.01 million metric tonnes, broadly in line with market expectations.
The company attributed the volume decline to weaker consumer demand and ongoing supply disruptions in North America. A temporary factory closure in Canada during the first quarter further constrained operations.
Despite these challenges, Barry Callebaut reported a 66.1% increase in net profit, supported by lower interest and tax expenses. Profit before tax also rose 1.3%, as savings on financing costs offset weaker operating performance.
The company highlighted broader market dynamics affecting the cocoa sector, including a significant surplus in global cocoa bean supply. West Africa, particularly Ghana and Côte d’Ivoire, accounts for nearly half of global production, contributing to the current oversupply.
At the same time, cocoa futures—used by the company to hedge against price volatility—have declined sharply from their 2024 peak, reflecting shifting market conditions.
Looking ahead, Barry Callebaut expects sales volumes to recover in the second half of the fiscal year ending August 31. The company has revised its full-year volume decline forecast to between 1% and 3%, an improvement from its earlier mid-single-digit decline projection.
While demand remains subdued, the group anticipates a gradual rebound as market conditions stabilise and supply chain disruptions ease.
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