London: Chocolate, gum and candy maker Cadbury PLC said on Thursday that sales in the first quarter rose just 2%, depressed by falling sales in continental Europe and North America.
The report disappointed the market, where analysts had forecast 3% growth. Shares fell 2.5% to 496 pence ($7.39) on the London Stock Exchange.
“After a period of share price weakness, investor attitudes toward the company have switched from excessive optimism that targets can be met, to mild pessimism that perhaps they might not,” said Jeremy Batstone-Carr, analyst at Charles Stanley & Co.
Sales of Creme Eggs and traditional shell eggs for Easter shot up more than 20%, pulling total sales up 10% in the United Kingdom and Ireland, the company said in a trading update.
Chocolate accounted for 48% of first-quarter sales.
Cadbury completed the disposal of its drinks business earlier this month, finalizing the sale of its Australia Beverages unit.
The company did not report earnings figures for the quarter.
CEO Todd Stitzer said sales had been depressed by de-stocking and softer demand in North America and Europe, offsetting good growth in emerging markets.
Sales in Europe outside the U.K. and Ireland were down 8%, North America sales fell 6% but revenue from the Middle East and Africa rose 12% and sales in Asia increased by 11%.
“In North America, while sales fell by 6% this was not perhaps as bad as it had been feared, and excluding destocking sales were said to be flat,” said Graham Jones, analyst at Panmure Gordon & Co.
He rated the stock a “buy,” believing that the first quarter report showed the company on course to meet full-year objectives.