Swiss chocolate maker Barry Callebaut has lowered its operating earnings oulook, citing supply concerns and industry overcapacity. This also touches on aspects of wall street.

Shares of the firm, which is the world’s largest chocolate maker, fell as much as 17% on the news.

Swiss chocolate maker Barry Callebaut on Thursday slashed its operating earnings forecast, citing falling cocoa prices, industry overcapacity and potential supply disruption linked to the Iran war.

The corporation, which is the world’s largest chocolate maker, mentioned it now expected earnings before interest and tax (EBIT) to decline by “mid-teens” percentage in its 2025 to 2026 fiscal year.

The outlook reflects a significant downgrade from just three months earlier, when the Zurich-headquartered corporation noted it was preparing for a return to growth.

Hein Schumacher, who was appointed Barry Callebaut CEO in late January, noted Thursday that the firm has an “unparalleled economy position” and fundamental growth opportunities, while warning of a “turbulent period” of industry disruption.

“In the first half of our fiscal year, cocoa bean prices decreased, which is encouraging for future chocolate sector momentum and supported strong free cash flow generation,” Schumacher mentioned in a statement.

“Yet the unique speed of the marketplace slump combined with a competitive overcapacity marketplace, volume declines and supply disruption impacted EBIT performance and adjusted our profitability outlook for the year as we prioritize restoring volume and leading the marketplace back to growth,” he added.

Shares of Barry Callebaut fell as much as 17% on Thursday. The stock was last seen trading off by around 15.8% shortly after 2:30 p.m. London time (9:30 a.m. ET).

Cocoa prices fell 0.72% on Wednesday, reaching $3,537.28 per tonne. Despite rallying over the past week, cocoa prices have slumped 41.6% since the start of the year, and are down 57.6% over the past 12 months, according to Trading Economics data.

Like most commodities, the closure of the Strait of Hormuz has impacted cocoa prices with restricted supply and higher costs. much stronger harvests compared to recent years, when prices have soared, have kept a lid on cocoa costs., on the other hand