Confectioner Thorntons’ profits plunged in the first half when sales at company-owned stores fell and margins suffered during highly promotional trading conditions.

Although sales rose 1.3 per cent to£128.4m in the 28 weeks to January 10, pre-tax profits slid 39 per cent to£7.3m.
Thorntons generated increased sales through its franchise, direct and commercial arms but like-for-likes at its own shops were hit by lower footfall as well as sector-wide discounting. Gross margins fell from 51.5 per cent to 49.2 per cent.
A new store-type tested in five locations outperformed other stores, but the retailer said the model still needs to be improved before a roll-out can be considered.
Chief executive Mike Davies remained bullish about prospects. He said: “Focus on customer service combined with our strong operational platform and initiatives to reduce operating costs position us well to take advantage of opportunities in the second half.
“These include a three week longer selling season due to a late Easter, increased selling opportunities following the closure of Woolworths and improved productivity versus last year when we incurred higher costs due to the early Easter.”

Topics