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Tue 26th Feb 2019 - Hotel Chocolat reports “encouraging start’ in New York and Japan
Hotel Chocolat reports “encouraging start’ in New York and Japan: Hotel Chocolat, the premium British chocolatier, has reported revenue up 13% to £80.7m for the 26 weeks ended 30 December 2018. Excluding its new US and Japan start-ups, profit before tax was up 11% to £14.4m. A total of 14 new stores opened in UK and Eire, contributing 4% to group sales growth. A new VIP Me loyalty card attracted 0.5m active customers. The Velvetiser in-home Hot Chocolat maker was launched and exceeded initial expectations six-fold. Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “This has been another period of progress for Hotel Chocolat with strong growth in sales, profits and cash generation. The critical Christmas period was again successful, supported by the launch of our new and innovative Velvetiser Hot Chocolate maker and by a deepening relationship with our customers via the new VIP Me scheme. Both developments will also support our plans for the key spring seasons of Mother’s Day and Easter. Growth in the UK continued to deliver improvements in profitability which have enabled us to invest in the launch of two new start-ups in New York and Tokyo, both of which are showing encouraging early signs, in terms of customer response and the initial store sales performance. I would like to thank everyone in the Hotel Chocolat team for their dedication in delivering another successful Christmas. Recent trading, including the Valentine’s period, is in line with the board’s expectations and we continue to make good progress against our key strategic objectives of opening more stores, improving our digital capability and increasing our production capacity whilst testing and learning in two large new territories.” On its international performance it stated: “In late November the group opened its first joint venture store in Tokyo, shortly followed by its first pilot store in New York, and; the board believes that both markets offer significant potential for future growth. A modest number of store openings in each market will be used to test the consumer response, the supply chain economics, and to build a business case for potential roll-out. Initial consumer response in both markets has been encouraging; the brand appears to resonate with consumers, the breadth of range is proving popular with local tastes, and pricing has been received as fair and reasonable. Whilst it is too soon to meaningfully conclude on the store economics, the new sites are performing in line with expectations and based on the first ten weeks of trading both stores would rank as top quartile within the UK estate. In July 2018 the group transferred its two Danish stores to a local partner under a franchise development agreement covering the Nordic region. The partner has opened two further stores in the period.”

Shake Shack like-for-like sales up 2.3% in Fourth Quarter, forecasts weaker sales growth in 2019:  Shake Shack has reported 2.3% like-for-like sales growth in Fourth Quarter to 24 February 2019. For 2019, the company is forecasting like-for-like sales that are either flat or up 1%. That outlook reflects the impact of the 1.5% in price increases that the company put in place in December.  Shake Shack’s projected revenue for this year is between $570 million and $576 million. Chief financial officer Tara Comonte told analysts on a conference call that some locations are experiencing a ‘sophomore slump’ after high traffic initially. The company counts stores open at least 24 months in its like-for-like sales metric. The company plans to open as many as 58 locations, both company-operated and licensed, in 2019. It is continuing its global expansion this year, with locations for the first time in mainland China, Singapore, the Philippines and Mexico. The company will open its first international office in Hong Kong later this year to support its Asian-focused growth. The company also released its outlook for 2020, targeting at least 320 new locations and more than $700 million in revenue. Chief executive Randy Garutti said: “We ended 2018 with a strong fourth quarter capping off another tremendous year of growth here at Shake Shack. 2018 was by far our most ambitious year yet. We opened 49 restaurants; 34 company-operated and 15 licensed operating across 27 states and 13 countries. Our team put forth an incredible collective effort in the fourth quarter opening 17 company-operated and three licensed Shacks with seven of those opening in the last two weeks of the year. We grew total revenue in ‘18 by 28% to $459 million. We earned adjusted Ebitda of $73.9 million representing more than 14% growth from 2017 and delivered positive same-Shack sales just over 1%. In the fourth quarter, we posted same-Shack sales of 2.3% and reported our strongest traffic number in ten quarters returning to nearly flat. As we celebrate Shake Shack’s 15th birthday this coming summer, I’d like to take a moment to reflect on how far we’ve come. A few weeks ago when I was meeting with a group of our Shack leaders, I shared a memory from 2004. As we close our doors on a busy day at the original and only Shack at the time at Madison Square Park, we achieved something unthinkable, our first $5,000 day.”

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