Thorntons reports satisfactory update
UK chocolate company Thorntons has reported its second quarter trading update for the period ending 9 January 2010. Trading was satisfactory and the company expects that interim profits will be ahead of last year and in line with expectations.
This period was notably different to the comparative period last year, which included sales to a specific franchisee and commercial customer, which subsequently went into administration. Furthermore, Thorntons effectively ceased the production of private label products.
Sales across all channels increased by 3% which, together with significantly lower levels of discounting in the own store retail estate, resulted in overall higher margins. Own store sales declined by 4.5% to £51.7 million and like-for-like sales declined by 4.4% but benefited from higher gross margins.
Franchise sales declined by 18.1% to £5.3m. The company was able to re-open 24 stores with new franchisees during the period bringing the total number of stores opened to 70 since the loss of 94 stores when the Birthdays chain went into administration in May 2009.
Thorntons Direct sales increased by 10.9% to £4.7 million. Consumer sales grew strongly following the launch of the new website and increased marketing activity. Chief executive Mike Davies, comments, “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.”
