Thorntons today confirmed that profits would be ahead of City hopes thanks to strong sales of branded chocolates at supermarket chains.
Analysts at house broker Investec Securities raised their target price and reiterated their “buy” recommendation on the retailer’s shares after the update, which came ahead of full-year results in September.
Thornton said chocolate sales through supermarkets increased 11.8 per cent during the ten weeks to 29 June, while international sales more than doubled to £900,000, helping its commercial arm lift sales 21.1 per cent during its fourth quarter.
It also reported more progress with its high street stores’ recovery, where underlying sales edged up 0.5 per cent, amid signs consumers are still prepared to splash out on the odd treat.
But total sales in its owned stores fell 3.8 per cent to £13.9 million after 34 closures during the year. It plans to shrink further to a “sustainable” retail estate of 180-200 stores, from its current 296 outlets.
Investec hiked profit forecasts for the year to the end of June by 16 per cent to £5.2m from earlier expectations of £4.5m on Thorntons’ turnaround success and growing market share.
However, retail expert Nick Bubb cautioned: “It’s a good job that Thorntons’ financial year ran to 29 June, as the hot weather since then will not have helped chocolate sales, even if some shops sell ice-cream now.”