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  • Writer's pictureMark Watson-Mitchell

Hotel Chocolat – record Christmas period trading sees broker predict store recovery

The premium British chocolatier had a very business festive season at its shops across the UK.

In the nine weeks to Christmas Day its store sales reported by the Hotel Chocolat Group (LON:HOTC) were up 10%, setting a new record for its Christmas campaign sales across its UK store estate.

Particular hits with the shoppers were the Velvetiser in-home drinking chocolate system, while its new Mince Pie drinking chocolate also went down a storm.

However, elsewhere within the group, including both its international and wholesale business did not perform to plan.

Co-founder and CEO Angus Thirlwell stated that:

"A late festive surge delivered sparkling store performances. When times are tough, shoppers prioritise quality products that are really worth it. Hotel Chocolat will continue to live up to these expectations: investing in more cacao and less sugar, funding nature-positive cacao farming, and championing British-made quality.

"We have grown Hotel Chocolat by 65% over the period since the start of the pandemic, adapting to some of the most difficult economic conditions on record. Taking a year, over FY23, to sharpen-up our operating model is the right thing to do, before we embark on further pursuit of the multiple growth opportunities ahead for our brand."

Analyst Wayne Brown at brokers Liberum Capital was impressed by the group’s retail sales at Christmas, while maintaining his Buy rating on the shares.

For the current year to end June he is going for a £13m sales slip to £213m, while pre-tax profits could be just £8.3m (£21.7m), dropping earnings by more than two thirds to 4.8p (15.3p) per share.

However, he anticipates a bounce-back in the coming year to £224m sales and £20.5m profits, worth 11.2p in earnings.

Even better sales and profits are expected the following year.

He has a 300p Target Price on the group’s shares, which are currently trading at around 185p.


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