Hotel Chocolat (LON: HOTC), a U.K. premium chocolatier and omnichannel retailer, announced a trading update for the 13-week period (Q2) and 26-week period (H1) ending December 26, 2021, on Tuesday.
Strong Recovery in Christmas Quarter
Revenue for Q2 increased 37% year-over-year.
Revenue for H1 was strong, increasing by 40% year-over-year and 56% compared to the equivalent period of FY 2020, the last equivalent period before the impact of COVID-19.
In the U.K., the brand’s strong position and multi-channel model enabled growth of 38%. New customer acquisition campaigns generated 38% more active customers.
In the US, the digital-first strategy drove growth of 128%, with active customer database growth of 119%.
In Japan, the company’s multi-channel joint venture achieved 131% growth. Since launching the VIP loyalty program 14 months ago, the database has grown by 1,000% to over 100,000 active customers.
Management Commentary
Hotel Chocolat co-founder and CEO Angus Thirlwell said, “All of our six growth drivers are behind the acceleration in sales: Velvetiser in-home drinks system, VIP Loyalty rewards, and Digital, whilst the USA, Global Wholesale, and the Japan joint venture are finding the formula for sustained growth, and our UK domestic market still has huge potential. Our Velvetiser in-home drinks system was a star performer during the period. The majority of our subscription customers are now coming from our popular hot chocolate and coffee machines and drinks. We invested in refreshing our key chocolate gift ranges in the period and that resulted in an immediate and strong uplift in sales, particularly the higher price-point categories.”
Wall Street’s Take
Three months ago, Berenberg analyst Ned Hammond kept a Hold rating on HOTC and raised its price target to 430p (from 390p). This implies 18.1% downside potential.
Overall, HOTC scores a Moderate Buy analyst consensus rating based on two Buys. The average Hotel Chocolat price target of 560p implies 6.7% upside potential to current levels.
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