Hobbycraft has reported a significant decline in profits despite achieving sales growth and improved margins for the fiscal year ending 18 February 2024.
- The retailer’s profits plummeted by 80% to £393,000 from £2 million, influenced by one-off costs and inflationary pressures.
- Hobbycraft experienced a growth in sales by 3.4%, increasing turnover by £7.2 million to £218.3 million.
- Despite the profit fall, the company improved gross margins from 56.9% to 58.4%, aided by strategic pricing and increased own-brand sales.
- Hobbycraft continued its expansion with seven new stores and enhanced online and digital offerings, including a new app.
In a challenging fiscal year ending 18 February 2024, Hobbycraft reported an 80% drop in profits, with earnings reducing to £393,000 from the previous year’s £2 million. This downturn was largely due to one-off costs and ongoing inflationary pressures affecting the sector.
Despite this setback, Hobbycraft saw a 3.4% rise in sales, managing to increase their turnover by £7.2 million, reaching £218.3 million. Like-for-like sales showed a marginal growth of 1.1%, underscoring a stable yet cautious consumer response.
The company’s ability to enhance gross margins, moving from 56.9% to 58.4%, was driven by strategic price adjustments and a boost in own-brand sales. This improvement provided some relief amidst the profit decline.
Hobbycraft’s online sales and click-and-collect services witnessed significant growth, with figures climbing 32.1% compared to pre-pandemic levels. This indicates a robust shift towards digital retail channels, supported by the introduction of the new Hobbycraft app.
Further, the retailer expanded its physical presence by opening seven new stores in various locations including Canterbury, Glasgow, Lakeside, and Southport, bringing the total number of stores to 119. This expansion is part of an aggressive £8.7 million investment aimed at strengthening both physical and online retail capabilities.
Hobbycraft remains optimistic about future growth, leveraging strategic investments to navigate current market challenges.
