Shares in Hotel Chocolat Group PLC (AIM:HOTC), the premium chocolate maker, rallied 6.5% higher despite a drop in full-year sales and underlying earnings, with investors focused instead on a strong start to the new financial year and management's optimistic expansion plans.
Sales rose by 14% year on year during the first quarter of financial year 2024 and with four new stores having been opened during the three-month period, the group’s board is confident in continuing to expand the company’s footprint while driving financial growth.
Planning to open 12 stores in 2024, compared to just one in 2023, the chocolatier is now focused on growing the group via “an ambitious store opening programme”, having focused on restructuring and cost-saving activities throughout the prior financial year.
Angus Thirlwell, the group’s co-founder and chief executive officer, said: “Hotel Chocolat is on the front foot again. The hard, foundational work we put in last year is now starting to deliver the results for us.
"Our new store format is trading well above our expectations, with 12 new locations planned to open in the next year. Four of them are open already and they are located across the UK from Glasgow to Bournemouth.”
Management has not provided any clear guidance as of yet but iterated that it entered the new financial year with a healthy cash balance and has entered the festive period with good liquidity and lower working capital.
Sales for the 53 weeks to 3 July 2023 dropped from £226 million to £204.5 million, while underlying earnings fell from £40.8 million to £24.1 million, the group revealed in a trading update.
Nevertheless, shares pushed higher and, having opened at around 140p on Thursday, have improved on the 20% drop the stock has suffered so far in 2023.