Hobbycraft profits plummet 80%
The group opened seven new stores during the period in Canterbury, Glasgow, Lakeside, Maidenhead, Poole, Southport and Wigan, taking the total number of stores to 119
Hobbycraft has reported an 80% drop in profits to £393,000, down from £2m the previous year, for the 52 weeks ended 18 February 2024.
The art and craft supplier attributed this loss to inflationary pressures and one-off costs that have impacted the retailer’s financial health despite their efforts to drive top-line growth.
Its adjusted EBITDA also declined 3.2% to £10.4m. However, total revenues increased 3.4% to £218.3m with LFL sales increasing by 1%.
Gross margin rate also increased to 58.4% from 56.9% in the prior period. The improvement in margin rate resulted from selective increases in retail prices, a reduction in freight costs, growth in own brand sales participation which increased to 45.5%, as well as effective stock management.
Additionally, Hobbycraft’s online and click and collect sales remained well ahead of pre pandemic levels at 32.1%.
The group opened seven new stores during the period in Canterbury, Glasgow, Lakeside, Maidenhead, Poole, Southport and Wigan, taking the total number of stores to 119.
It has also invested £8.7m in new store openings and enhancements to its digital offer, such as the launch of the Hobbycraft app.
Matt Davies, chairman of Hobbycraft, said: “Although we remain conscious that the period will continue to pose challenges. I have confidence that the business is well placed to capitalise on the longer-term recovery in consumer sentiment.”