Confectionery retailer Thorntons has reported a "disappointing" overall performance in its latest trading update.
The company recorded a drop in both sales and profits for the 28 weeks to January 10th. Thorntons had a pre-tax profit fall of 8.8 per cent to £6.5 million, while sales declined 8.2 per cent to £128.2 million. Officials explained that one of the main reasons for the drop was an unexpected decline in orders from two of its major supermarket accounts.
With the loss of a revenue stream, Thorntons has been hit considerably hard as it looks to continue its recovery. The company has also been hampered by supply problems at its warehouse in Derby, while a profit warning issued in December has kept investors "cautious" about the year ahead.
Jonathan Hart, Thorntons chief executive, said: "The performance of our business in the first half was not as we planned. We continue to be cautious in our expectations for the full year. We are well positioned to take advantage of an improvement in consumer spending."
Competitive market conditions
Thorntons is among a number of high-street retailers that have been hit hard in recent months. The introduction of the Black Friday shopping phenomenon took the focus off the traditionally busy Christmas period. The event, which takes place towards the end of November, saw many companies miss out on the boost from Christmas.
Supermarkets especially have been under pressure of late. Members of the traditional 'big four' have struggled in recent months. The likes of Asda and Tesco reported disappointing sales figures for Christmas, with the rise of discounters such as Aldi and Lidl being highlighted as a major threat to business.
Thorntons' lack of supermarket orders during this period not only damaged sales and profits but also its share price, which fell by 2.74 per cent as of 11:34 GMT on Monday (March 2nd).