Despite Revenue Growth and New Store Openings
- 80% drop in profits for Hobbycraft
- Total revenues increased by 3.4% to £218.3m
- LFL sales increased by 1%
- Gross margin rate improved to 58.4%
- Online and click & collect sales up 32.1%
- 7 new stores opened, totaling 119 stores
- £8.7m invested in digital offerings including Hobbycraft app
Hobbycraft, the art and craft supplier, has reported an 80% drop in profits to £393,000 for the 52 weeks ended 18 February 2024. The decline is attributed to inflationary pressures and one-off costs despite efforts to drive top-line growth. Adjusted EBITDA fell 3.2% to £10.4m. Despite these challenges, total revenues increased by 3.4% to £218.3m with LFL sales up 1%. The gross margin rate improved to 58.4%, driven by selective price increases, reduced freight costs, and a rise in own-brand sales participation (45.5%). Effective stock management also contributed to the improvement. Online and click & collect sales remained above pre-pandemic levels at 32.1%. The group opened seven new stores in Canterbury, Glasgow, Lakeside, Maidenhead, Poole, Southport, and Wigan, bringing the total store count to 119. £8.7m was invested in digital offerings like the Hobbycraft app.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Hobbycraft’s financial performance, including specific numbers and reasons for the drop in profits, as well as details about their strategies to improve sales and growth. It also includes a quote from the chairman of the company.
Noise Level: 3
Noise Justification: The article provides relevant information about Hobbycraft’s financial performance and strategies, but it lacks a deeper analysis or exploration of the underlying causes and potential long-term consequences of the reported drop in profits.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses Hobbycraft’s financial performance, including a drop in profits and changes in revenue and EBITDA. It also mentions the company’s efforts to manage costs and grow sales, as well as its expansion plans. However, it does not directly impact any specific financial markets or companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text and it does not meet the criteria for an extreme event happening in the last 48 hours.
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