Shares in chocolate retailer Thorntons soured after it reported a weaker than expected 0.6% rise in total sales over the important Christmas trading period.
In the 14 weeks up to and including 7 January 2012 total sales increased to £83.7m as it battled against tough retail conditions.
It warned that profitability was hit by heavy discounting. "This has been evident across all our sales channels and has negatively impacted our gross margins and consequently profitability in the first half of the year as we stated in our December trading update," said chief executive Jonathan Hart
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Commenting on the outlook for sales, Hart added, "We expect continued weakness in consumer sentiment throughout 2012. This reaffirms our strategy to rebalance the business, create a smaller retail estate, revitalise our brand and most importantly restore profitability over the next three years."
Own store sales declined by 6.8% to £44.9m with a like for like sales decline of 4.2% after store closures and amid a tough retail environment. Franchise sales declined by 17.5% to £4.1m.
Commercial sales increased by 16.9% to £29.2m and total commercial sales growth for the 28 weeks to 7 January 2012 increased by 7.3%.
Thorntons Direct sales increased by 8.1% to £5.5m with consumer and online sales up 13% year on year.
"Our online business performed well over the period. The continued decline in sales from our Own Stores and Franchises was consistent with the wider retail pattern experienced in the High Street. Our new products were successful and our Christmas ranges sold through well. We ended the period with minimal excess stock," Hart added.
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