Lindt sales rise, sees profit boost from lower tax rate

ZURICH (Reuters) - Swiss chocolate maker Lindt & Spruengli boosted its share of a stagnating market in 2016 thanks to solid showings in Europe, Japan and Brazil, it said on Tuesday. Overall sales grew 6.8 percent to 3.90 billion Swiss francs ($3.87 billion), in line with the average estimate of 3.89 billion francs in a Reuters poll of eight analysts. Organic sales - stripping out currency moves - grew 6.0 percent, within its target range of 6 to 8 percent. The rate of organic sales growth increased from 4.4 percent in the first half to 7.0 percent in the second as customers snapped up Christmas season promotions. "The group's operating margin is expected to increase within the strategic target range. There will be a disproportionate increase in net profit due to a lower tax rate," it said. The group has said it aims to grow the margin on earnings before interest and taxes by 20 to 40 basis points. Full financial results for 2016 are due on March 7. Its shares were indicated 2.5 percent higher in pre-market business. Chocolate makers are grappling with stagnant markets and subdued consumer confidence, but Lindt managed to grow sales thanks to premium products such as Lindor chocolate balls and gold foil-wrapped Christmas chocolate bears. But adjusting U.S. brand Russell Stover's product line and promotions strategy weighed on sales growth, it said. Sales in Lindt's biggest region, Europe, were up 7.4 percent in local currencies, thanks to Germany, France and Britain. Growth in North America was 3.4 percent even as the overall chocolate market contracted for the first time in years. Lindt is also building up its network of chocolate shops as it tries to become the world's leading premium chocolate retailer. Its global retail business posted double-digit sales growth as it added about 60 new shops and chocolate cafes, mainly in Europe, Canada, Brazil and Japan. (Reporting by Michael Shields; Editing by John Revill and Mark Potter)