Shares in Hotel Chocolat (HOTC:AIM) sweetened up 3% to 385p as the premium British chocolatier upgraded annual profit guidance after seeing tasty trading since reopening its brick and mortar stores on 12 April.
For the year ended 27 June 2021, Hotel Chocolat now anticipates underlying pre-tax profit will be higher than its previous expectations, having generated forecast-beating total sales of £165 million.
That represented year-on-year growth of 21% versus the Covid-impacted 2020 sales outturn, and impressive 24% growth over the pre-pandemic 2019 financial year.
With all channels open, group sales for the 10 weeks to 27 June 2021 were up 63% on the same period in 2020 when all brick and mortar outlets were shut, and 34% higher than the comparable pre-pandemic period in 2019.
ENCOURAGING REOPENING
Since reopening its physical stores on 12 April, Hotel Chocolat’s performance has been encouraging, with strong trading in smaller cities and market towns largely offsetting lower footfall in commuter and tourist locations.
Following the end of Lockdown 1.0 in July 2020, sales from stores progressively increased from July to October and management expects to see a similar improvement in the months ahead.
MANAGEMENT REMAINS CONFIDENT
Angus Thirlwell, co-founder and CEO, was in confident mood. He commented: ‘I am fortunate to be able to say that the growth avenues ahead of us have never been better in Hotel Chocolat’s history.
‘The strategies we put in place two years ago are now delivering accelerated growth. Our Velvetiser in-home drinks system, our VIP and digital programmes, and our USA and Japanese joint-venture start-ups have step-changed our growth potential.’
Thirlwell added: ‘Our goal of becoming the most tech-activated chocolate brand is moving forward in leaps and bounds and is already helping to power our major achievements and future growth. Indeed, this year we expect more than 50% of our sales to come from digital, partners, and subscription-continuity models, reflecting how Hotel Chocolat is growing and evolving.’
THE LIBERUM VIEW
Following the update, Liberum Capital upgraded its 2021 underlying pre-tax profit forecast by 20% to £7 million and its 2022 estimate by 15% to £15 million.
Reiterating its ‘buy’ rating, the broker insisted Hotel Chocolat’s near-term outlook ‘looks exciting as reopened stores are capturing the return of impulse-driven shopping, while online retains and grows its volumes of more gifting-based missions’.
Liberum believes Hotel Chocolat’s path to becoming a global brand is growing evermore exciting.
‘Multiple levers and routes to market give considerable growth headroom in the UK. Nascent Japan and US (together 6x the size of the UK market) operations continue to show very encouraging signs, laying the foundation to step up from “test and learn” into a “grow and scale” phase’, enthused the brokerage.
