The company's shares plunged by more than 30 per cent after the announcement.
Thorntons, which slashed its dividend in September, said it had been hurt by the continued weakness in consumer sentiment and heavy promotions. It has already announced plans to shut a third of its stores.
"Following continued weakness in consumer sentiment and high levels of promotional activity in the market place, the board now considers profits for its full year will fall short of current expectations," it said.
"The board now believes that profit before taxation, exceptionals and impairment and onerous lease charges will be around break even for the 53 weeks ending 30th June 2012."
Retailers across the high street face a make-or-break Christmas trading period following a tough year, with consumers increasingly cutting back on spending due to high inflation, increasing unemployment and general economic uncertainty.