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Thorntons commercial focus pays off over key seasonal period

By Oliver Nieburg+

24-Apr-2013

UK chocolatier Thorntons has reported increased sales in the third quarter as its focus on the commercial channel drove performance over Valentine's Day, Mother's Day and Easter.

In a third quarter (Q3) trading update issued today, the company reported a 4% rise in total sales to £60.6m ($92.4m).

Thorntons began the process of closing just under half of its 344 own-stores in 2011 to focus on growing sales in third party retailers – its commercial channel.

Boxed chocolate share gains

Thorntons branded UK commercial sales grew by 10% in Q3 to £27.4m ($41.8m). The firm also grew its share in the UK Total Boxed Chocolate market from 11.7% to 12.2% and in the Inlaid Boxed Chocolate market from 32.9% to 35.6%.

UK commercial sales outpaced own-store sales for the first time this year, which were flat on £26m.

Thorntons CEO Jonathan Hart, said:  “This period includes the important trading seasons of Valentine's Day, Mother's Day and Easter where we saw an encouraging sales performance in our main channels.”

The company’s Easter market share grew to 4.7% from 4% last year.

“Growing market share further demonstrates the strength of the Thorntons brand and offer. In addition as a result of actions taken over the past two years gross margins were slightly ahead of our expectations,” said Hart.

Profit outlook ‘above expectations’

He added that the firm now expected pre-exceptional profit before tax to be ahead of market expectations and said there was potential for further improvement in the final quarter.

Earlier this month, Thorntons said that the current market expectation for its full year earnings before tax was £3.1m ($4.7m).

International, private label and online

During Q3, the company also made substantial gains in export markets. International sales rose 30.8% to £1.1m ($1.7m).

The premium chocolatier is focusing on English-speaking markets such as Australia, South Africa, UAE and the USA.

Thorntons private label business, which was halted in late 2010, has restarted and made improvements during Q3, taking private label sales in the quarter to £1.7m ($2.6m).

Sales fell 4.6% for the company’s online business Thorntons Direct to £2.2m ($3.4m).The company launched a new website in September last year and said the changes were beginning to feed through.

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