Hotel Chocolat profits to beat expectations as sales climb

Hotel Chocolat reported that sales rose 21% last year to £165m. On a two-year basis, compared to 2019 and before the pandemic hit, revenues were up 24% in the 52 weeks to June 27.

In the final 10 weeks of the period, sales advanced 34% versus 2019, and 63% compared to the same period in 2020 when the retailer’s stores were closed during lockdown.

Hotel Chocolat reported that UK store performance since the latest reopening in April has been encouraging. It said: ”Strong trading in smaller cities and market towns has largely offset lower footfall in commuter and tourist locations.

”Following the end of the first lockdown in July 2020, sales from stores progressively increased from July to October and the board anticipates a similar improvement in the coming months.”

Lower rents part of the success story

Hotel Chocolat has renegotiated lower rents on 30% of its UK estate - ”either in the form of a lower fixed amount, or a reduced variable percent of sales” - and the remainder of its estate has a ”lease event” due in the next 24 months.

The retailer now expects that underlying pre-tax profits will be higher than previously anticipated.

Chief executive Angus Thirlwell said: “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. 

“We expect more than 50% of our sales to come from digital, partners, and subscription-continuity models”

“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. Our brand-building stores will continue to play a pivotal role in our digital-led business, with an unrivalled ability to introduce new customers to our brand.                     

“I am particularly excited by what we have achieved so far in the USA and Japan, two of the three largest economies in the world. We have great growth opportunities there for Hotel Chocolat and strong teams in place to drive and support it.”