Hotel Chocolat posts heavy loss following COVID-19 store closures

Watch: Hotel Chocolat profits melt away as it counts cost of pandemic

Premium British brand Hotel Chocolat Group (HOTC.L) reported a heavy loss after COVID-19 massively hit sales over the key Easter period.

Profits slumped by 83% to £2.4m ($3.04m) for the year to the end of June, according to a company statement released on Tuesday.

Shares were down by 1.5% at around 11:30am in London on Tuesday.

In the first half of the year, sales were up 14% to £92m but they slipped by 14% to £45m due to COVID-related store closures. This had a major impact on the business as 70% of its revenue at the time came from physical stores.

Following the losses over the Easter period, the company said it made rapid adaptations to recall inventory and refocus the business on online and partner sales.

"Whilst uncertainty will continue for all of us in the coming year, our pipeline of potential growth opportunities has never been stronger,” said Angus Thirlwell, co-founder and CEO of Hotel Chocolat.

“We are working hard to anticipate potential trading scenarios for the year ahead and are planning prudently to be ready to adapt quickly and effectively as the situation evolves.”

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Digital demand for the business is up 150% compared to last year and the company now has 1.3 million active members on its VIP loyalty discount scheme, up 50% year-on-year.

The business has also accelerated its e-commerce plan in particular growth markets, including the US, where the business has seen strong digital growth following a new e-commerce partnership with THG Ingenuity.

The premium chocolatier’s swift response to market changes has made some analysts confident in its outlook, with senior investment and markets analyst Susannah Streeter of Hargreaves Lansdown calling its online service “sophisticated” and offering “ sweet respite for locked-down chocaholics.”

She added that “innovation continues to be the name of the game, and the company has lifted the lid on plans to roll out a Willy Wonka inspired chocolate box, called ‘The Inventing Room’ to lure customers into tasting and subscribing to its latest collections.’’

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