Thorntons issues profit warning after weaker supermarket demand

The Derbyshire-based retailer, which has 249 stores, said its full-year earnings will be lower than last year due to weaker supermarket demand as the grocery sector grapples with difficult trading conditions.

It also blamed teething problems at a new centralised warehouse in Derbyshire which opened in the autumn but has resulted in lost and late sales.

Shares slumped by as much as 27 per cent as the warning delivered a setback to the company’s continuing turnaround strat- egy.

Thorntons has relied on more sales through its commercial channels such as supermarkets as it comes to the end of a three-year plan that has seen it close dozens of its own stores. In October it told the market it expected to meet full-year pre-tax profit forecasts of £9.65m for the year to June, up almost a third from £7.5m in its last financial year.

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.

Independent retail analyst Nick Bubb said: “Embarrassingly, less than six weeks after an upbeat strategy update with analysts, today has brought a Christmas profit warning from Thorntons.”

Thorntons’ sales have fallen in the supermarket price war that has seen major players such as Tesco lose market share to German discounters Aldi and Lidl.