Hobbycraft has experienced a significant 80% decline in profit for the year ending 18 February 2024, despite an increase in revenue.
- The arts and crafts retailer cites inflationary pressures and one-off costs as major contributors to the profit drop.
- Hobbycraft’s revenue increased by 3.4% to £218.3 million, supported by a rise in own-brand sales.
- Strategic initiatives, such as price adjustments and a focus on online sales, have bolstered gross margins.
- The retailer is opening new stores and enhancing its digital offerings in response to the challenging retail market.
Hobbycraft, the prominent arts and crafts retailer, has reported an 80% decline in profit for the fiscal year ending 18 February 2024. The company’s profit reduced to £393,000 from a previous £2 million, largely attributed to significant one-off costs and the ongoing inflationary pressures affecting many sectors across the UK.
Despite this profit decline, Hobbycraft achieved an adjusted EBITDA of £10.3 million, only a slight decrease of 3.3% from the prior year’s £10.7 million. Gross margins improved notably from 56.9% to 58.4%, driven by strategic price adjustments and an increase in own-brand sales.
Revenue for Hobbycraft saw a healthy increase, edging up by 3.4%, which translates to a rise of £7.2 million, culminating in total revenues of £218.3 million. Like-for-like sales experienced a modest increase of 1.1%, reflecting a consistent consumer interest in the retailer’s product offerings.
Online sales and click-and-collect services have been a focus area for Hobbycraft, experiencing a 32.1% growth compared to pre-pandemic levels. This strategic move has been part of their adaptation to changing consumer behaviours and increasing demand for convenient shopping options.
Hobbycraft has also been expanding its physical presence by opening seven new stores in locations such as Canterbury, Glasgow, Lakeside, and Southport. This brings the total number of stores to 119. In addition to physical expansions, the retailer is investing £8.7 million in enhancing its digital offerings, including the development of a new app to improve customer experience.
Looking ahead, Hobbycraft remains optimistic about its position in the retail market, despite the existing pressures. The company has started the new financial year positively, with further growth in sales and margins anticipated.
Hobbycraft’s strategic initiatives in response to market challenges suggest a resilient outlook for future growth and recovery.
