Thorntons’ profits hit by weak Xmas
THORNTONS’ profits took a turn for the worse in the first half of the year, crashing more than 90 per cent after the chocolatier was forced to slash prices to lure cash-strapped shoppers.
Profits fell to £618,000 in the 28 weeks to 7 January, compared with £8.3m in the first half. Excluding £2.4m of exceptional costs, profits before tax fell to £3.1m.
Thornton’s slump in profits were expected after the company in December issued its fifth profit warning in 20 months. It has also decided to waive its interim dividend as a result.
Christmas is the key sale’s season for the company, however chief executive Jonathan Hart said “selective purchasing” and “trading down into the promotional lines” had eaten into both its sales and margins.
Hart joined the company last year and introduced a turnaround plan, which includes shrinking Thorntons’ estate by at least 180 of its stores over the next three years. He said the remaining stores would “continue to play a key role as shop windows for our brand”.
“Thorntons retains a strong brand and a widespread consumer appeal,” Hart said yesterday, adding that the group had increased its market share by 7.1 per cent to 7.7 per cent.
“We are encouraged by our strong range for the remaining key spring trading seasons of Mothers Day and Easter and have a strong order book to support this,” he said.