Hotel Chocolat swings to loss as online struggles

Sales at the chocolatier declined to £204.5m for the 53 weeks ending July 3, 2023, down from £226.1m the previous year. 

Profit before tax swung from £21.7m last year to a £800,000 loss for the period, which the retailer said was in line with market expectations. 

Hotel Chocolat said: “Lower sales driven by online and international sales reductions led to the anticipated small underlying loss in FY23. However, the business is underpinned by a strong balance sheet and healthy cash position, exiting FY23 with significant liquidity provided by the group’s revolving credit facility agreement.”

UK sales declined by 8% year on year as ecommerce sales rebalanced post-pandemic. Sales in stores rose by 8%, partly driven by a boost in the retailer’s train station locations as travel rebounded. 

Hotel Chocolat said it was in year one of a three-year plan to create operating efficiencies across the business and that it had begun to see improvements in overcoming the “growing pains” it experienced last year. 

In Japan, the retailer’s 21 licensee stores made a small profit in the first six months, which it said was a key outcome of its improved operating model. 

Chief executive and co-founder Angus Thirlwell said: “Hotel Chocolat is on the front foot again. The hard, foundational work we put in last year is now starting to deliver the results for us.

“Our new store format is trading well above our expectations, with 12 new locations planned to open in the next year. Four of them are open already and they are located across the UK from Glasgow to Bournemouth.

“Our ongoing stores continue to perform strongly, benefiting from a raft of exciting new products, the resumption of in-store tasting and our unique Love Match offer, which reflects human individuality to closely match it across our Hotel Chocolat range.”