The premium chocolate and coffee retailer said cost-cutting measures implemented last year are materialising slower than anticipated, with a $0.4m loss before tax anticipated for 2023
Hotel Chocolat expects to make an underlying loss of £0.3m ($0.4m) before tax for its FY23 | Photo credit: Hotel Chocolat
Hotel Chocolat is set to make a loss in its 2023 financial year after revealing cost-cutting measures were taking longer to materialise than expected.
The premium chocolate and coffee retailer said sales during the Easter period this year had been lower than normal, with year-to-date digital and wholesale revenues falling amid weaker consumer sentiment.
Although total sales currently remain within market expectations, Hotel Chocolat said it expects to make an underlying loss of £0.3m ($0.4m) before tax. The business anticipates full-year revenues reaching £201.8m ($257m).
Profit margins have been further dented by disruption in international markets, with sales In Japan hindered by Covid-related restrictions last year and trading across North America hampered by supply chain bottlenecks.
Hotel Chocolat, which reported 37% year-on-year sales growth for the 12 months ended 27 June 2022, described its current financial year as a ‘transition’ period to re-shape the business and prepare for future growth.
However, indicating tough trading restrictions remaining in the near-term, UK-based Hotel Chocolat expects 2024 sales and underlying profit before tax to be lower than current market expectations due to ‘ongoing weakness in consumer sentiment and continuing inflationary pressures’.
In January 2023, Hotel Chocolat CEO Angus Thirlwell said its 2022 results indicated the UK market for the Hotel Chocolat brand was greater than the company had previously estimated. The breadth of activity and pace of growth was the fastest in the group’s history, he added.