(Alliance News) - Hotel Chocolat Group PLC on Thursday said trading was in line with expectations in the latter part of 2019, but inefficiencies made growth more costly than expected.
The chocolatier said its revenue for the 13 weeks ended December 29 grew 11% year-on-year, while revenue for the 26 weeks to the same date was up 14% from the year before.
Of the 14% revenue growth figure, three percentage points of this resulted from new store openings. These included nine new locations in the UK, two in the US, and three joint venture locations in Japan. As a result, Hotel Chocolat finished the period with 125 UK locations, 4 locations in the US, and 5 in Japan.
The maker and retailer of chocolate said its trading in the 13 week period, and since then, has been in line with management expectations. However, the cost of this growth turned out to be "modestly higher" than predicted as a result of supply chain inefficiencies, suggesting a hit to margins. Hotel Chocolat said these inefficiencies "are being addressed in 2020".
Chief Executive Angus Thirlwell said: "This was another strong performance from Hotel Chocolat. In our domestic UK market, we grew our VIP-Me member base to over 1.1 million active members, as well as driving strong organic growth from our existing physical locations. We will continue to bring Hotel Chocolat to more locations in the UK where the deals are appropriate."
Thirlwell added that the US and its Japan joint venture are performing well, adding that while much of 2019 focused on entering these new markets, 2020 will focus on a "supply-chain transformation". This will mean moving away "from being a UK-based company operating from owned channels, to one more suitable for multi-channel multi-territory international supply."
Shares in Hotel Chocolat were down 1.3% at 422.00 pence in London on Thursday morning.
By Anna Farley; annafarley@alliancenews.com
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