Barry Callebaut, the world's largest chocolate maker, issued a significant profit warning on April 16, 2026, slashing its operating profit outlook due to a sharp decline in cocoa prices, industry overcapacity, and potential supply disruptions linked to the Iran war [1]. The company now expects its earnings before interest and tax (EBIT) to decrease by a 'mid-teens' percentage in its 2025 to 2026 fiscal year, marking a substantial downgrade from its previous guidance just three months earlier, when it anticipated a return to growth [1].
CEO Hein Schumacher, who took the helm in late January, acknowledged the company's strong market position and growth opportunities but cautioned about a 'turbulent period' of industry disruption. Schumacher noted that while the decrease in cocoa bean prices in the first half of the fiscal year was encouraging for future market momentum and supported strong free cash flow, the rapid market decline, combined with competitive overcapacity, volume declines, and supply disruptions, negatively impacted EBIT performance and forced a revision of the profitability outlook [1].
Following the announcement, Barry Callebaut shares plunged as much as 17% on Thursday, with the stock trading down approximately 15.8% shortly after 2:30 p.m. London time (9:30 a.m. ET) [1]. Cocoa prices fell 0.72% on Wednesday to $3,537.28 per tonne. Despite a rally in the past week, cocoa prices have dropped 41.6% since the start of the year and are down 57.6% over the past 12 months, according to Trading Economics data [1].
The closure of the Strait of Hormuz has contributed to restricted supply and higher costs for cocoa, but much stronger harvests compared to recent years have kept cocoa costs in check, despite previous price surges [1].
CONCLUSION
Barry Callebaut's profit warning and the subsequent 17% share price plunge highlight the severe impact of collapsing cocoa prices, industry overcapacity, and supply chain disruptions. The company's revised outlook signals ongoing challenges for the chocolate industry, with market volatility likely to persist in the near term.