Hotel Chocolat slips into the red as consumer spending on luxury products declines

By Anthony Myers

- Last updated on GMT

Hotel Chocolat Chief Executive Angus Thirlwell. Pic: Hotel Chocolat
Hotel Chocolat Chief Executive Angus Thirlwell. Pic: Hotel Chocolat

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Shares in Luxury UK chocolate maker Hotel Chocolat dropped 19% at the end of last week after it announced in a statement on Friday (23 June) it is expected to turn a loss in the current financial year. Revenue of £201.8m and underlying profit before tax of £0.3m for the 2023 financial year is anticipated, it said.

In a statement, Chief Executive Angus Thirlwell said: “As previously announced, FY23 is a transition year to re-shape the business in readiness for its next stage of growth. While excellent progress has been achieved on cost base efficiencies, they are materialising later in the year than initially anticipated.”

Sales and profit before tax for next financial year are currently anticipated to be “lower than current market expectations,​” the group said in a statement, which was thanks to “ongoing weakness in consumer sentiment and continuing inflationary pressures​”.

Pressure from UK inflation and the impact on premium products has become more noticeable in the first half of 2023, as shoppers become increasingly cautious about spending - pushing the brand into the red. But Hotel Chocolat said it expects to reap the benefits of its 20% pre-IFRS earnings before interest, taxation, depreciation, and amortisation in the financial year 2026.

The London-listed brand said sales are “in line with market expectations​” and “cash generation remains healthy with cash at hand of £19m and zero debt​” with profits hit by worse-than-expected Easter sales.

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