Thorntons blames order timings for Q1 sales fall
Chocolatier Thorntons has reported a 12.8% reduction in first quarter sales at its FMCG division which it attributed to the timing of orders.
The decrease led to an 11.9% fall in overall sales to £41.4 million in the 14 weeks to 4 October although the retailer is confident that it will meet market expectations for pre-tax profit before exceptional items of £9.65 million for the full year. This compares to £7.5 million in the year to 28 June 2014 when profit surged by 60.4%.
Thorntons' chief executive Jonathan Hart said: "As we said in September we anticipated that sales for this quarter would be below last year as a result of the increasingly fluctuating order patterns in our UK commercial channel.
“These fluctuations will become more significant within the context of the company's performance as we continue to grow our FMCG business making quarterly comparisons less meaningful. As we demonstrated last year, these variances do not necessarily affect overall annual performance.”
During the period, sales in Thorntons' retail division declined by 10.9% to £20.6 million as the retailer closed 12 stores to take the number of shops down to 249 at the end of the quarter. Like-for-like sales fell by 3.7% reflecting subdued consumer sentiment and weakness in footfall seen since Easter. Franchise sales declined by 19.1% due to the timing of orders and franchisees experiencing similar weakness in footfall.
Meanwhile, international sales increased by 20.8% and Consumer Direct sales edged up 3.2%.
Looking ahead Hart said: "We remain confident of improving EBIT margin further and maintaining positive profit growth for the full year, in line with market expectations driven by strong annual sales growth in our UK commercial channel.
"We continue to make good progress with our strategy of rebalancing the business and have exciting plans in place for the key Christmas season. We remain mindful that the economic situation is still challenging for many of our shoppers and trade customers, although our growth plans do not depend on an economic upturn."
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