Shares of Delfi (P34.SI), the Singapore-listed chocolate manufacturer, plummeted 3.37% in Tuesday's trading session, reversing recent gains that had pushed the stock to a 52-week high. The sharp decline comes as investors reassess the company's outlook in light of challenging first-quarter results and ongoing industry headwinds.

Delfi's recent business update for the first quarter of 2025 painted a less-than-sweet picture for the confectionery giant. The company reported a 0.5% year-on-year dip in net sales to US$149.8 million, with currency weakness masking what would have been a modest 1.5% growth. More concerning for investors was the significant 27.2% year-on-year plunge in EBITDA to US$17 million, highlighting the pressure on the company's profitability.

The primary culprit behind Delfi's struggles appears to be the persistently high cocoa prices, which have squeezed the company's margins. Gross profit margin declined by 2.2 percentage points year-on-year to 28%, directly impacting the bottom line. While Delfi's management remains confident in the company's robust distribution network, well-established brands, and strong balance sheet, today's stock movement suggests that investors are adopting a more cautious stance in the face of these industry-wide challenges.