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Givaudan’s second-quarter organic sales beat market estimates on Thursday, but its shares fell around 5 percent as litigation costs weighed on profit and tariff repayments clouded the fragrance and flavour maker’s outlook for the rest of 2026.
Organic sales grew 4.3 percent in the quarter, ahead of a company-compiled consensus of 3.7 percent, marking the first acceleration in Givaudan’s organic growth since late 2024.
The results were “solid but not stellar”, which was not enough to sustain the shares’ strong recent run, Vontobel analyst Arben Hasanaj told Reuters.
Givaudan said it expected input costs to rise by a low single-digit percentage in the second half of the year and would raise prices to offset them. Partially recovered US tariffs will be repaid to customers, weighing on organic sales growth, it added.
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“We haven’t seen any relevant or material impact on raw material prices, because of the coverage that we had,” CEO Christian Stammkoetter said during a media call, adding that the overall situation now looked slightly better.
However, Bernstein analysts cautioned in a note that market forecasts were likely underestimating the spread between Givaudan’s raw material costs and prices this year and into 2027.
Givaudan also booked 103 million Swiss francs ($126 million) in non-recurring costs in the first half, mainly tied to fragrance and flavour litigation, which analyst Victoria Nice from Bernstein said were “not well anticipated”.
As a result, half-year net income fell nearly 20 percent to 475 million francs, missing a consensus of 554 million francs.
Givaudan’s fragrance division, which creates scents for prestige perfumes and everyday household goods, saw organic growth of 7.1 percent in the quarter, topping a 5.8 percent consensus, as strong demand for consumer-goods scents outweighed slower growth in fine fragrance.
Its flavours division, which makes flavourings for food and drink, roughly met market expectations with 1.5 percent growth, as a rebound in South Asia, Middle East and Africa was tempered by continued softness in Latin America.
The drag was concentrated in Mexico, Givaudan’s largest market in the region, where beverage demand was sluggish, Stammkoetter said.
By Rafal Wojciech Nowak
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