Hotel Chocolat has said it is “cautious” after reporting a fall in half-year profit and revenue, as it predicts a drop in Mother’s Day and Easter sales due to consumers buying less luxury items amid the cost-of-living crisis and rising inflation.
The premium chocolate maker reported a fall in its revenue to £129 million down from £142 million last year, while its gross profit was down almost £10 million to £75 million.
While still trading in line with market expectations for sales, it remains cautious about consumer sentiment over Mother’s Day, Easter, Eid and Father’s Day, which are normally key sales periods for chocolate producers.
Hotel Chocolat recently began a formal redundancy consultation, putting jobs at risk as it plans to take the business in a “leaner and more competitive direction”.
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Hotel Chocolat also said its underlying operating profit had plummeted from £26 million last year to just £12 million, while profit before tax had dropped from £20 million to just £8 million.
Looking ahead to financial years 2024 and 2025, the chocolate manufacturer anticipates a return to sales and earnings before interest, tax, depreciation and amortisation (EBITDA) with a growth target of 20% in financial year 2025.
“It is telling that there are progressively fewer successful chocolate store models in the UK and elsewhere. It is a difficult model to develop, with extensive protective attributes acquired in the process,” the company said.
Co-founder and chief executive of Hotel Chocolat, Angus Thirlwell reflected on the results calling it a “strong sales performance” through “hefty investments we continue to make into our brand.
“Over the last three years, we have increased retail like-for-like by 25% through product innovation and improving the quality of our database marketing,” he said.
“We have announced the opening of a further 50 UK locations over the next 3-5 years, with the first wave planned this autumn”
Thirlwell also said that “having grown sales by 66%” from pre-pandemic levels, “we are taking this year to sharpen-up our operating model before we embark on the next stage of growth.”
