Hotel Chocolat says profit to be lower than expectations after weak Easter

Retailer Hotel Chocolat warned on profits on Thursday as it said that sales over Easter, vital for a chocolate company, had been worse than expected.

The company, which is in a period of transition, said there were some products it was unable to get on to shelves over the period.

“Easter period sales (were) lower than expected due to some range gaps which could not be addressed this year due to transition-year efficiency focus, but which have already been addressed for future seasonal events,” the company told shareholders on Thursday.

“Digital and wholesale channels had lower revenues than initially planned due to focus on quality of earnings.”

It now expects to break even on its adjusted pre-tax profit in the financial year, lower than market expectations.

But on the bright side for shareholders, the business said that it had sold more products at full price, helping to push up margins.

“During this financial year, Hotel Chocolat has taken effective action to overcome the growing pains of rapid growth and scaling £200m in revenues,” said chief executive Angus Thirlwell.

“We are now well set up for the next stage of growth both in the UK and overseas key markets.

“Getting through these barriers to growth are a real test of culture and I am unceasingly impressed by the strength of the Hotel Chocolat culture, as we remodelled our way through the 2023 financial year.

“Our manufacturing and distribution is well invested now, with suitable headroom, liberating capital for future revenue growth.

“We can see more than 50 new locations for a Hotel Chocolat latest format store in the UK over the next few years and our adapted approach to international major markets is making sound progress.

“We are very grateful to our growing base of loyal and new customers, who are signalling that ethical and higher cacao premium chocolate is definitely worth it.”