Trading Update
19/01/2023 07:00
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RNS Number : 2025N Hotel Chocolat Group PLC 19 January 2023
19 January 2023
HOTEL CHOCOLAT GROUP PLC
("Hotel Chocolat", the "Company" or the "Group")
Trading Update
Hotel Chocolat Group plc, a premium British chocolatier and omni-channel
retailer, today announces a Christmas and half-year trading update.
For the 9-week period ending 25 December 2022:
● UK retail like-for-like store sales increased +10% YOY
● Group total sales including international fell -8% YOY
For the 26-week half year, ending 25 December 2022 ("H1"):
● UK retail like-for-like sales increased +7% to £74m, and increased +25%
like-for-like versus pre-Covid H1 FY19
● Group total sales including international fell -9% YOY to £130m, an increase
of +65% versus pre-Covid H1 FY19
Revenue Growth 9 weeks ending 26 weeks ending 26 weeks ending
25/12/2022 25/12/2022 25/12/2022
Year on year Year on year Versus FY19 pre covid
UK & Ireland stores 'like for like'(1) +10% +7% +25%
Total UK. & Ireland -5% -7% +65%
Group including international -8% -9% +65%
1 Like for like stores are those trading in the same location for the full
reporting period and excludes refits.
Christmas Campaign Highlights:
● Set a new record for Christmas campaign sales across the UK store estate
● Strongest ever sell-through of full-price seasonal products, with residual
Christmas inventory into January sale -80% lower year on year
● Velvetiser in-home drinking chocolate system was the star category, with new
Mince Pie drinking chocolate proving a real hit
● Online revenues lower YOY due to return to stores together with a deliberately
lower marketing spend YOY
● Wholesale revenues lower than planned at the beginning of the year due to
cautious inventory management by online partners and a focus on 'quality over
quantity' with fewer new partners
Encouraging early progress on strategic plan previously announced:
● Strong cash generation: net cash of £31m as at 18(th) January 2023
● Total inventory reduction of -17% year on year. Perishable inventories are
-35% lower YOY whilst non-perishable hardware increased YOY to improve
availability. Inventory reduction supports increasing mix of full-price sales
in second half.
● Overhead cost reduction plan is on track
● Improving sales trend following record UK temperatures in Q1 which temporarily
hit consumer demand across retail, online and wholesale channels.
International growth: Japan licence deal announced earlier this month shows
progress on capital-light strategies to optimise the proven brand appeal.
Short term we will continue to see temporary YOY reductions in international
revenues from Japan and US whilst the adaptations to our strategy begin to
take effect
UK growth: New store format and up-sized re-sites have performed strongly,
leading to increased plans for UK store estate growth over the next 3 years
Outlook
'Quality over quantity' continues to be our focus, with FY23 previously
indicated to be a transition year towards an improved business shape from FY24
onwards, with the goal of 20% Ebitda margin in FY25.
The Group continues to trade in line with market expectations(2) though we
remain cautious about consumer sentiment over the upcoming seasonal events of
Valentine's Day, Mother's Day, Easter, Eid and Father's Day.
We expect the trend of customers reverting to stores to shop to continue in
the second half, which is advantageous to the brand because our stores are
well invested to deliver an uplifting experience for customers.
Notice of Results
The Board expects to announce the Group's results for the six months ended 25
December 2022 in early March 2023.
Angus Thirlwell, Co-Founder and Chief Executive Officer, said:
"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.
"We have grown Hotel Chocolat by 65% over the period since the start of the
pandemic, adapting to some of the most difficult economic conditions on
record. Taking a year, over FY23, to sharpen-up our operating model is the
right thing to do, before we embark on further pursuit of the multiple growth
opportunities ahead for our brand."
2. The Company believes that current market expectations for the year ending 25
June 2023 revenues of £213m and underlying profit before tax of £8m.
Enquiries:
Hotel Chocolat Group PLC Tel: +44 (0) 1763 257 746
Angus Thirlwell, Co-Founder and CEO
Peter Harris, Co-Founder and Development Director
Matt Pritchard, CFO
Liberum (Nominated Adviser and Sole Broker) Tel: +44 (0) 20 3100 2000
Clayton Bush
Edward Thomas
Miquela Bezuidenhoudt
Citigate Dewe Rogerson Tel: + 44 (0) 20 7638 9571
Angharad Couch
Ellen Wilton
Alex Winch
Notes to Editors:
Hotel Chocolat is a premium British chocolate maker with a strong and
distinctive D2C brand. The business was founded by Angus Thirlwell and Peter
Harris, who are still executives within the business, and has traded under the
Hotel Chocolat brand since 2003. The Group is unusual in being a grower
(organic cacao farm in Saint Lucia), a manufacturer (Cambridgeshire, UK) and
owning its extensive direct to consumer channels (branded stores, websites).
The Group was admitted to trading on AIM in 2016.
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