UK: Thorntons sounds cautious note despite Q2 sales rise

Thorntons PLC today reports its second quarter trading update for the 14 weeks up to and including 12th January 2013.

Key points

· Total sales for the 14 weeks increased by £4.5 million to £88.0 million, an improvement of 5.4% compared with the same period last year.

· Thorntons branded Commercial sales grew strongly by 26.4% to £34.7 million. Thorntons' share of the Total Boxed Chocolate market increased from 11.7% to 12.1% and its share of the Inlaid Boxed Chocolate market increased from 33.5% to 35.0%.*

· In Own Stores like for like sales declined by 1.3%. A further three stores were closed in the quarter, in line with the strategy, resulting in 27 fewer stores than a year ago. This was the major contributor to the sales decrease of 9.0% to £40.9 million in Own Stores.

· Franchise sales declined by £1.1 million to £3.0 million as expected, mainly reflecting the placing into administration of our major franchisee in May 2012.

· Thorntons Direct sales decreased by £0.7 million to £4.8 million as the late deployment of the new website combined with operational issues had a significant impact on sales in the period.

· Private label sales substantially increased to £2.5 million.

· International sales grew by 69.0% to £2.1 million reflecting a positive first response to our strategic initiatives over the past year in this area.

Nielsen MAT (Moving Annual Total) to week ended 29/12/12
Jonathan Hart, Thorntons' Chief Executive, commented:

"We are pleased with the overall progress made during this key trading period. These results demonstrate the effectiveness of our multi-channel distribution model and our strategy to rebalance our routes to market and revitalise the business as a whole. We have grown market share and demonstrated the continued strength of the Thorntons brand despite a challenging economy and a weak confectionery market.

"We enter the second half of our financial year with profits in line with our expectations and ahead of last year. Our seasonal lines have sold through well, resulting in stock levels lower than anticipated and below last year at the period end. Our important spring seasons, in particular Easter, lie ahead of us and will be key to the outcome of the full year. We have strong trading plans for spring and an encouraging Commercial order book. We are confident in our strategy and the actions we are taking but remain cautious given the continuing challenge of the economic climate."

Original source: Thorntons