Thorntons: announces Q2/2015 trading update

Derbyshire / UK. (tht) British Thorntons PLC reports its second quarter trading update, including a strong Retail performance which is in contrast to disappointing UK Commercial sales within the FMCG division. These were a consequence of challenges experienced in a couple of major grocers combined with short-term difficulties at Thornton´s new centralised warehouse.

The Retail division experienced strong like-for-like sales growth of 5.0 percent for the quarter as shopper demand for Thorntons´ inlaid boxes, seasonal specialities and advent calendars all contributed to an encouraging season culminating in an outstanding 7.8 percent increase in like-for-like sales during December (01st to 24th), highlighting the strength of our brand and product offering.

FMCG Division

Divisional sales decreased by 10.3 percent to 41.9 million GBP.

• UK Commercial sales declined by 10.5 percent. Overall market share of Christmas declined to 7.3 percent from 8.4 percent, the majority of which was driven by the challenges outlined above.
• International sales increased by 19.0 percent.

Retail Division

Divisional sales declined by 2.4 percent to 44.9 million GBP.

• Four stores were closed and two relocated as we right size our retail estate to focus on long-term sustainable locations. This resulted in 247 Own Stores at the end of the quarter.
• Like-for-like sales increased by 5.0 percent.
• Consumer Direct sales increased by 13.0 percent.
• Franchise sales declined by 6.4 percent.

Chief Executive Jonathan Hart: «The Retail division experienced strong like-for-like sales growth in the quarter with an outstanding Christmas season which highlights our shoppers´ appreciation of our brand, product offering and in-store experience. Demand for our boxed chocolates, seasonal specialities and advent calendars was particularly high».

«Alongside very positive results from our Retail division for the second year running, we were disappointed that the continued growth we anticipated in the UK Commercial channel of our FMCG division had not been delivered. The challenges we experienced within specific grocers accounted for the majority of the share decline».

«Good growth in many of our grocery, convenience and high street accounts and a strong performance from our Retail division gives us confidence in shopper demand for our brand and products. We continue with our transformation towards an FMCG business and the investment in our people, systems and factory is ongoing. We have good plans for the spring seasons and the Board remains confident in its multi-channel strategy and ongoing transformation».