Thorntons Plc reported an 11.9% decline in first-quarter sales due to fluctuating timing of commercial orders and lower consumer sentiment, sending the companys shares falling to the lowest in more than a year.
On Monday, the British chocolate maker said in a statement that its UK commercial sales had dropped 16.4% for the quarter ended October 4th compared to a year earlier. The company also reported a rise in international sales, but due to the decline in UK deliveries, it showed a 11.9% drop in group sales.
The companys shares went down to 87.50 pence per share in intra-day trading on Monday on the LSE, the years lowest. However, the retailer said that it “remained confident” about its full-year performance.
“As we said in September we anticipated that sales for this quarter would be below last year as a result of the increasingly fluctuating order patterns in our UK commercial channel,” said Jonathan Hard on Monday. “As we demonstrated last year, these variances do not necessarily affect overall annual performance. Based on current visibility of orders we expect this to reverse in the second quarter and that we will see year-on-year UK commercial sales growth in the first half, albeit at a more modest level due to strong prior year comparatives,” added the companys CEO.
Currently, analysts pre-tax profit estimates call for £9.65 million and the retailer aims to finish the year “in line” with market projections. Last month the company reported a £7.5 million pre-tax profit for the previous fiscal year.
“As we had anticipated, this has shown a revenue decline from both the retail and commercial, with the timing of orders from the grocery channel affecting the latter. This is expected to correct during the second quarter, resulting in some modest UK commercial revenue growth advance in the first half” said Nicola Mallard, retailer analyst at Investec.
Thorntons Plc traded at GBX 91.36 at 11:28 GMT in London, marking a 7.72% daily decline and a -11.52% yearly change. Day high landed at GBX 94.50, while day low hit GBX 87.32, setting a new 52-week low. The company is valued at GBP 67.95 million. According to the Financial Times, the 3 analysts offering 12 month price targets for Thorntons Plc have a median target of GBX 175.00, with a high estimate of GBX 200.00 and a low estimate of GBX 165.00. The median estimate represents a 76.77% increase from the previous close of 99.00 pence.
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