Hotel Chocolat has said that it plans to cut back on discounts this holiday season as the British luxury chocolate maker swung to an annual loss on one-off charges due to U.S. store closures and the restructuring of a Japanese joint venture.
'Our decisions to focus on full-price sales and quality over quantity, coupled with a resurgence of physical store performance means that we anticipate December will be busier than ever,' it said in a statement.
The chocolatier said a majority of its Christmas gift range is priced between £2.50 (€2.90) and £8.50 (€9.87).
Challenging Environment
"It goes without saying that the current environment is challenging on multiple fronts," commented chief executive Angus Thirlwell.
"Over the last few months we have taken decisive steps to reduce risk and to fully pull all our self-help Ievers in both our manufacturing and retailing businesses. One thing is for sure, we will never compromise on the brand standards and values which have built our following to this point."
Hotel Chocolat posted a statutory loss of £9.4 million (€10.9 million) for the year ended June 26, compared with a profit of £3.7 million a year earlier.
Underlying pretax profit came in at £21.7 million, on revenue of £226.1 million (€262.5 million) for the year.
Analysts had expected a profit of £9.6 million on revenue of £236 million, according to a company-compiled consensus.
'Prudent' Approach
Hotel Chocolat said it was adopting a 'prudent' approach on its outlook for the year.
“As we head into our busiest part of the year, I am confident that the strategic direction we have put in place will improve the prospects of the business for significant years to come," Thirlwell added. "Our decisions to focus on full price sales and quality over quantity, coupled with a resurgence of physical store performance means that we anticipate December will be busier than ever."
Analyst Viewpoint
Commenting on its performance, Wayne Brown, analyst with Liberum, said, "The FY22 results have come in as expected. They do however contain several exceptional costs that primarily relate to the reshaping of the business and its strategy.
"Having delivered a three-year sales CAGR of 29%, FY23 is a transitionary year as the group rebases its focus on profits and cash flow generation from what is now a much higher revenue base."
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