Thorntons blames slump on sunshine

• 2011 profits may be only half of expected levels • Like-for-like sales down 12.6% in last quarter • Ice-cream sales fail to offset fall in demand for chocolate Chocolate maker Thorntons has hit the market with its second profit warning of 2011, blaming the recent sunny weather for a slump in sales over Easter. While most of the retail sector has welcomed the mini-heatwave that bathed Britain for much of April, it proved bad news for Thorntons’ with sales of eggs and other products down. It brought forward its latest trading update to Tuesday morning, after calculating that profits for this year could be just half of the City’s estimates. The warning came just four months after the company blamed December’s snow for a disappointing performance over Christmas. Jonathan Hart, Thorntons’ chief executive, said the company had been faced with “unprecedented weather conditions” during its two key trading periods. “The past quarter has been extremely challenging particularly in our own stores and for franchisees and we foresee the prospect of this weakness in high street footfall and spending continuing,” said Hart. He added that Thorntons had tried to cushion the impact of the warm weather by selling ice-cream at more stores, but this could not compensate for the drop in demand for chocolate. Like-for-like sales at Thorntons’ own stores fell by 12.6% over the last 16 weeks, while trading at its franchises slumped by more than a fifth. Thorntons, which had been expected to announce its third-quarter trading update on Thursday, estimated the pre-tax profits for the current year will be between £3m and £4.5m. Analysts had expected the firm to match last year’s profits of £6.1m. So far this year, Thornton’s comparable sales are 7.5% lower than a year ago. Hart, who joined the firm in January, has promised to deliver a strategic review to turn Thornton’s prospects around. This is expected to include closing some of the company’s 600 stores . Shares in Thorntons dropped 8% to 74p in early trading on Tuesday. Thorntons Retail industry Weather Food & drink industry Graeme Wearden guardian.co.uk

Posted by on May 3, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.