Thorntons is to put more emphasis behind its “summer” products in a bid to drive sales in what is a traditionally weak period for the business, the UK firm’s CEO has told just-food.
The chocolate maker, which this morning (17 February) posted a steep increase in first-half profits, historically makes most of its profits just before Christmas but the company insisted that sales in the second half of its fiscal year were “progressively improving”.
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“We’ve got a new product called Melts, chocolates with a praline centre, which we’re just launching into the supermarkets as we speak. What helps improve that profitability in the second half is growth in the commercial channel,” CEO Mike Davies told just-food.
“We’ve also just launched a new range of boxed chocolates called Metropolitan, and in the summer months, we want to put more emphasis behind products like ice-cream.”
Davies added: “Thorntons has historically made most of its profits just before Christmas, and if you go back to the year 2005/2006, in the second-half of the financial year, we actually lost GBP7.6m. In the last financial year we lost GBP1m so it is progressively improving. That’s an illustration of what we already have done and is something that we want to continue to do.”
The CEO said Thorntons had achieved success with its Moments brand, which had achieved annual sales of GBP10m and explained that the company was looking for similar success outside its traditional category of boxed chocolates.
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By GlobalData“Melts is a new product into a sharing category that is outside our traditional boxed choc area. Pick-and-mix has gone into our own stores in the last six months and we’ve also got a range of traditional sweets that will compliment the range in the summer,” Davies said.
Thorntons this morning booked a 24.6% gain in profits, boosted by higher demand for its own-brand chocolates and a reduction in discounting.
Profits increased to GBP9.1m (US$14.4m) in the period, up from GBP7.3m last year. Gross margins increased 1.6% year-on-year to 50.8%.
Overall, however, the group reported a 0.7% dip in sales, which fell to GBP127.4m.
Finance director Mark Robson emphasised that Thorntons did see a lift in commercial sales.
“In terms of our sales movement, within retail includes own stores, franchise and direct and they were down GBP3m, but that was compensated for in the uplift in commercial sales,” Robson told just-food.
“So whilst our own-store sales are down by GBP1.9m and franchise down by GBP1.7m, commercial sales were up 41% to GBP9.5m. There was a little bit of switching from our own-stores sales into commercial sales,” he insisted.
