Thorntons issues profits warning

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Thorntons issues profits warning

Chocolate maker Thorntons has warned that its earnings will fall this year after seeing reduced demand from some supermarkets in the run-up to Christmas.
The retailer, which has 249 stores, has also experienced short-term problems at its centralised warehouse in Derbyshire, which opened in the autumn, resulting in lost and late sales.
Shares in Thorntons opened more than 20% lower today after the shock warning to the London stock market.
Thorntons has relied on more sales through its commercial channels such as supermarkets as it comes to the end of a three-year turnaround plan that has seen it close dozens of its own stores.
In October it told the market that it expected to meet full-year pre-tax profits forecasts of £9.65 million for the year to June, up almost a third from £7.5 million in its last financial year.
However it now expects profits for the current period will fail to grow after a "significant reduction" in previously indicated orders from major grocers who also took in stock later than anticipated.
It said: "The performance in the grocers has been mixed with good growth in several of our major partners yet significant volume decline in some others where prior year sales of high-volume lines have not been repeated."
The business added that its new warehouse was now working normally, while its store estate was also experiencing like-for-like sales growth.
In October it reported a quarterly sales slump due to lower supermarket demand and a quieter period for its own high street stores.
The business said then that revenues through commercial channels such as supermarkets fell 12.8% to £20.8 million in the 14 weeks to October 4, causing group sales to tumble 11.9% to £41.4 million.
Thorntons has said it plans to reduce the size of its store estate to between 180 and 200 outlets over the medium term.
The Evening Standard’s City correspondent Jamie Dunkley has more.

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