UK: Thorntons Q3 sales hit by commercial arm decline
- Q3 sales fall 7.6% to GBP57.7m (US$97m)
- Commercial sales down 8%
- "Confident" on FY hitting expectations
Hart says Thorntons still on-track for FY
UK chocolate group Thorntons booked a drop in third quarter sales as a "strong" Easter failed to offset slow trading in February and March and a performance at Valentine's Day and Mother's Day that "fell below expectations".
The company has been managing the decline of its retail arm by closing under performing stores and shifting its focus to third party sales. However, the commercial unit saw an 8% fall in sales in the period.
Nevertheless, Thorntons insisted that its year-to-date performance was on-track. Commercial sales rose 8.6% in the first nine months.
CEO Jonathan Hart said the group expected to hit market expectations for the full year. Consensus expectations are for pre-exceptional PBT of GBP7.3m.
THIRD QUARTER TRADING UPDATE & INTERIM MANAGEMENT STATEMENT
Thorntons today reports on trading during its third quarter for the 15 weeks up to and including 26 April
2014. Both operating divisions reported good sales of Easter specialities.
Sales in the third quarter saw a reduction of 7.6% against the same period last year due to the combined effect of early spring deliveries in our second quarter, slower sales through February and March in our UK Commercial channel and the cumulative effect of planned store closures.
For the year to date, UK Commercial sales have increased by 8.6% and the Retail division has delivered positive like-for-like growth of 1.8%.
• UK Commercial sales declined by 8.0%. A strong Easter performance, where sales of our seasonal specialities grew in excess of 20%, was offset by the impact of the early spring sales reported in the second quarter combined with slower sales in February and March and a performance at Valentine’s Day and Mother’s Day that fell below expectations.
• International sales increased by 3.4%, accounting for just under 3% of total revenue.
• Like-for-like sales increased by 1.2% driven by a consistent performance over the key spring seasons including Easter.
• Own store sales declined by 8.8% reflecting 38 store closures compared to the same period last year in line with its strategy. Ten stores closed in the period resulting in 271 Own Stores at the end of the quarter.
• Consumer Direct sales increased by 5.6%.
• Franchise sales increased by 5.7%.
Jonathan Hart, Thorntons' Chief Executive, commented:
“Set against the continuing backdrop of a competitive and challenging trading environment the key Easter season saw all our channels delivering sales growth. Customers responded positively to our Easter innovations and we anticipate further good growth in our Easter market share.
Original source: Thorntons
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