Hotel Chocolat posts sales surge after chocolate remains popular during pandemic

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Hotel Chocolat Group Plc (LON:HOTC) posted a surge in sales after chocolate proved to be a popular buy during the pandemic.

The AIM-listed firm said trading since December continues to be in line with management’s expectations, despite higher investments to speed up digital and international growth plans, and pandemic-related response costs.

In the 13 weeks to December 27, sales jumped 19% while they increased 11% in the 26 weeks to the same date.

In the UK, the chocolatier flexed its multichannel model to respond to the strong demand from its loyal, direct customer base, while online growth more than offset the impact of the temporary closures of physical retail due to government restrictions.

In the US it pivoted the multichannel business model, with sales up 19% in the 13 weeks and 8% in the 26 weeks.

In Japan, having opened a further 12 outlets during the half year, the joint venture is now operating from 18 locations, with a “substantially” increased e-commerce database.

Analysts at Peel Hunt increased the target price to 400p from 350p and changed the full-year forecasts from a £2mln adjusted loss before tax to a £3mln profit.

“Many things have evolved in the past 12 months and one aspect that has changed Hotel Chocolat for the better is the switch of many of its customers from retail only to multi-channel,” the broker commented.

“That move was shown in spades in the second quarter (Oct-Dec) when lockdowns were a feature but overall sales growth picked up from around flat to around 20% (albeit at a cost as all contingencies had to be covered). VIP Club membership has risen quickly and helped sales retention.”

Shares rose 2% to 378.2p on Tuesday at the opening bell.

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