Specialist retailer Hotel Chocolat has issued its second profit warning of the year, blaming ongoing inflationary pressures and softening consumer sentiment.
In an update, the retailer said it is anticipating delivering revenues of £201.8m and underlying profit before tax of £0.3m for the 2023 financial year.
Hotel Chocolat said sales remain in line with market expectations, while the brand is unburdened with debt and has £19m cash at hand.
The retailer said: “As previously announced, the 2023 financial year is a transition year to reshape 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.
“Cash generation remains healthy with cash at hand of £19m and zero debt. For the 2024 financial year, the group expects sales and underlying profit before tax to be lower than current market expectations due to ongoing weakness in consumer sentiment and continuing inflationary pressures.”
It is the retailer’s second profit warning of the year, following a downgrade in March that Hotel Chocolat pinned on a slowdown in international demand.
As a result, the retailer plans to reshape its business to drive new areas of growth. It aims to open 50 new stores across the UK in the next three years and has targeted five new out-of-town retail park stores in time for Christmas.
By the end of the 2025 financial year, Hotel Chocolat said it aims to achieve 20% pre-IFRS EBITDA.
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