US Edition 
Thorntons shares crash after warning of sales drop and distribution troubles
Thorntons issues profit warning as commercial clients reduce orders and distribution problems hit sales in key Christmas period
Thorntons’ shares plunged on Tuesday morning after the chocolate maker issued a profits warning, blaming supermarkets cutting their orders and distribution problems weighing on the business in the crucial pre-Christmas trading period.
The shares plummeted as much as 35pc after the company’s trading update revealed declining sales in its fast moving consumer goods division.
Thorntons said it expected sales in its UK commercial channel, which sells to supermarkets and grocers, to decline in the second quarter of the year, dragging earnings below those achieved last time round.
In a statement the company said it had faced two “principal challenges”.
“We have recently experienced a significant reduction in previously indicated orders from the major grocers who also took in stock later than anticipated,” the company said.
“While there has been an overall decline, the performance in the grocers has been mixed with good growth in several of our major partners yet significant volume decline in some others where prior year sales of high-volume lines have not been repeated. We have also seen good growth in the convenience and high street sectors.”
Thorntons’ distribution network also contributed to the decline, with the company saying “despite extensive prior testing” it suffered “significant short-term difficulties with our new centralised warehouse which resulted in disruption for all our customers”.
This resulted in the company losing out on sales to commercial customers as Thorntons missed promotional slots and reorders.
Thorntons, which said it had centralised its warehouse and distribution operations to meet “current and future business patterns and growth”, added that the system is now working normally.
The company’s retail division, which sells Thorntons’ chocolate direct to customers, is experiencing like-for-like growth the company said.
Thorntons took a battering during the recession as consumers cut down on luxuries and the business began implementing a turnaround that involved closing dozens of owns outlets, promoting chocolate as a gift and focusing on selling its products through third-party retailers such as supermarkets.