UK: Thorntons festive sales fall
By: just-food.com | 14 January 2010
UK chocolate maker Thorntons booked a fall in second-quarter like-for-like sales today (14 January) as a "disappointing" performance in its stores offset growth elsewhere in the business.
For the 14 weeks to 9 January, Thorntons said trading was "satisfactory" and that it expects interim profits to be "ahead" of last year and in line with board expectations.
Thorntons' sales last year included sales to Birthdays and Woolworths plc, both of which subsequently went into administration. The firm also ceased the production of private-label products.
Total sales for the period declined by 2.4% to GBP80.7m (US$131.4m). After excluding sales of private-label products, sales grew by 3%.
However, own-store sales fell 4.5% to GBP51.7m and like-for-like sales dropped 4.4% although Thorntons benefited from higher gross margins.
Franchise sales also declined, sliding 18.1% to GBP5.3m. Thorntons secured more franchise contracts in the period, gaining 24 stores with new franchisees.
Thorntons said it had now opened 70 franchise outlets since the loss of 94 stores when Birthdays went into administration in May last year.
Thorntons Direct sales increased by 10.9% to GBP4.7m, boosted by the launch of a new website and increased marketing activity. Commercial sales also increased, reaching GBP19m, a rise of 6.5%.
Mike Davies, Thorntons' chief executive said: "We saw a pleasing continuation of growth in commercial sales and Thorntons Direct during this important trading period. The decline in own-store sales was disappointing, although this was primarily driven by our own decision to protect profit margins through significantly reduced discounting - but we were able to sell all the Christmas stock by the end of the period."
Thorntons will announce its interim results for the twenty-eight weeks ended 9 January on 17 February.
Sectors: Confectionery, Retail
Companies: Thorntons
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