Insurer Direct Line (DLG), food delivery platform Deliveroo (ROO), sofa seller Made.com (MADE) and chocolatier Hotel Chocolat (HOTC:AIM) are among the latest companies to warn about earnings as inflationary pressures and recession fears bite.

In general, companies issuing profit warnings this year have been dealing with the twin effects of rising costs and reduced demand, leading to a drop in earnings guidance.

While the market has already priced a lot of these risks into share prices, investors still seem to be taken by surprise given the reaction to the latest trading updates.

Consultant EY says the number of profit warnings issued by UK-listed companies jumped 66% year-on-year in the first half of 2022, with over half blaming higher costs.

It found 136 companies warned on earnings, up from 82 in the first half of 2021. More than half of these warnings came from consumer-facing sectors as demand and confidence fell.

There are signs that inflation could soon peak, such as a fall in commodity prices. However, that will take time to work its way into the system.

Deliveroo bucked the trend on 18 July when its share price rose on a profit warning. It said gross transaction value growth fell to 3% in the second quarter versus 12% in Q1, adding that forward growth guidance would be significantly less than previously expected.

It is now looking at between 4% and 12% gross transaction value growth in the full year from a previous range of 15% to 25%.

Normally that would be enough to spook the market, but investors liked the news that it expects to subsidise fewer takeaways.

Made.com’s shares have fallen by 88% in value since its stock market debut in June 2021. It has suffered from supply chain disruptions causing major delays to customer deliveries. This was followed by higher costs and a drop in demand as consumers cut back on spending.

Yet another profit warning from the sofa maker on 19 July saw the company say the rate of sales and earnings decline could be up to twice as much as it previously expected for the full year.

A key part of Hotel Chocolat’s growth story was the opportunity to expand across the US and Japan. Unfortunately, things haven’t gone quite to plan and a restructuring for these territories was a key contributor to its latest profit warning.

The US is to become an online and wholesale operation only, while Covid disruptions have derailed progress in Japan. Hotel Chocolat will now only fund necessary working capital in Japan and leave its partner to find additional funding elsewhere.

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