Hotel Chocolat fell into the red in 2025 as it battled with higher cocoa and employment costs, while also investing into its factory and supply chain.
Losses surged to £11.9m during the year to 27 December 2025, reversing a £10.8m profit the previous year. Revenue fell 36.7% to £225.2m, down from £356m, however the decline was skewed as the previous period covered 78 weeks following the acquisition of the business by Mars in November 2023, compared to a 52-week period in the latest accounts.
Global CEO Angus Thirlwell acknowledged that margins had been “materially affected” as the business absorbed the cost of volatile cocoa and other raw material prices, as well as the increase in National Insurance contributions and the national living wage in April, following Rachel Reeves’ autumn budget.
The business had also significantly invested into its UK stores and supply chain, ahead of its re-entry to the US in March 2025. Twenty new stores and cafés were opened nationwide. A new Velvetiser flakes production line was also installed at its Huntington HQ to support the global expansion.
Global cocoa prices surged by more than 200% throughout 2024 and the early part of 2025, peaking at $12k per tonne in January 2025, as climate change and disease led to a slump in production in the Ivory Coast and Ghana, where Hotel Chocolat sources the majority of its chocolate.
However rather than reformulate its products, the business had chosen to absorb the costs in order to maintain “its long-standing commitment to ‘more cacao, less sugar’ consistent with the core product philosophy”, Thirlwell said.
Gross profit margin slipped from 62.2% to 57.5% as a result.
The business was also hit with exceptional one-off costs of £5.4m resulting from the acquisition by Mars.
“We consider the combination of strategic investment and cost pressures in the period to represent a considered near-term trade-off in support of sustainable, higher-quality growth going forward,” Thirlwell said.
The accounts also include income from Hotel Chocolat’s luxury hotel spa and resort at its 140-acre Rabot Estate plantation in St Lucia.
Hotel Chocolat unveiled what was its biggest brand refresh for 21 years in March 2026, in what it said was a move to make its products more accessible to shoppers and combat soaring inflation.
It included a redesign of its signature giftbox collections, a widening of price points and an overhaul of its core chocolate range.
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