- Strong Christmas like-for-like sales
- Strategic progress made to reshape the business
- Cautious near-term outlook for consumer sentiment
Premium chocolatier Hotel Chocolat (HOTC:AIM) set a record for Christmas campaign sales across UK stores after seeing its strongest ever sale-through of full-price seasonal products.
This left the company with residual inventory 80% lower year-on-year going into January sales.
A strong Christmas and early signs of encouraging progress on its strategic plan which has resulted in strong cash generation gave the shares a 10% boost to 205p.
Co-founder and CEO Angus Thirlwell commented: ‘A late festive surge delivered sparkling store performances. When times are tough, shoppers prioritise quality products that are really worth it.
‘Hotel Chocolat will continue to live up to these expectations: investing in more cacao and less sugar, funding nature-positive cacao farming, and championing British-made quality.’
CAUTIOUS OUTLOOK
The company said it continues to trade in line with market expectations which imply full year sales to 25 June 2023 of £213 million and underlying pre-tax profit of £8 million.
However, it remains ‘cautious’ about consumer sentiment over the upcoming important seasonal events including Valentine’s Day, Easter, and Mother’s Day.
For the half year ending 25 December UK and Ireland like-for-like sales were 10% higher year-on-year while total group sales including international fell 8%.
Against the pre-Covid period UK and Ireland like-for-like sales are 25% ahead and group sales including international are 65% higher.
A TRANSITION YEAR
The focus continues to be quality over quantity as it reshapes the business over 2023 and moves towards its goal of achieving a 20% EBITDA (Earnings before interest, tax, depreciation, and amortisation) in the 2025 financial year.
This means in the short-term international revenues from the US and Japan are expected to fall. The Japanese licence deal announced earlier in January demonstrates progress on developing ‘capital light’ strategies which are aimed at leveraging the brand.
The company said it is increasing plans to grow the UK store estate following ‘strong’ performance from new store formats.
