Chocolatier Thorntons has posted another year of profit growth after shuttering its loss-making store estate.
The Ferrero-owned brand shut its network of retail stores in 2021, having racked up losses nearing £200m under the Italian confectionery giant’s ownership.
It moved to a profit for the first time since its 2015 acquisition last year – and further grew core profitability in its most recent financial year, according to newly published accounts.
The accounts showed Thorntons sales continued to fall, by 13.8% from £76.5m to £66m, as the brand worked to optimise its range and position itself as a premium player in chocolate.
That production rationalisation helped gross margin rise to 30.3% from 26.8%. Operating profits stood at £3.3m, up from £3.1m in the previous financial year.
A Ferrero spokesperson said: “Since acquiring Thorntons, a core part of our strategy has been to build the brand in our e-commerce offering and in grocery channels using Ferrero’s experience and expertise.
“In the last year, we have continued to invest into the Thorntons brand, the manufacturing operation and infrastructure. Thorntons remains a key priority and valuable part of our UK business, and we will continue our commitment to ensure its sustainable growth.”
Sales have rebounded since the close of its financial year. According to NIQ data, Thorntons chocolate value sales grew by 7.5% in the year to March 2024, with Thorntons boxed up 6.1% within that and its classics range rising by 10%.
At the time of its decision to shut its retail estate in 2021, Thorntons had suffered pre-tax losses of £26.7m in that period and £37.7m in the previous Covid-hit year, taking losses under Ferrero’s ownership to £190m at that date.
The wider Ferrero operation in the UK, which encompasses Thorntons, delivered a 17.7% rise in sales to £557.5m.
This increase was driven by the integration of Eat Natural products into the accounts, while it said it also benefitted from higher sales volumes as it sought to avoid fully passing on higher costs to consumers.
Despite cost of sales rising by £43m, group-wide gross margins improved and operating profits rose to £14.8m from £11m.
Ferrero commented: “We are pleased with the business performance which highlights the benefits of our continued investment in our brands and UK manufacturing plants, as we continue to deliver high-quality products that our consumers enjoy.
”In common with many other manufacturers, the last year suffered from the ongoing inflationary environment impacting the overall cost base and HFSS restrictions that we continue to navigate thanks to our brands’ performance on the market.
”Furthermore, our recent acquisitions have allowed us to be present in new market segments, meeting the evolving needs and trends of consumers. The strong brands performance coupled with the integration of Eat Natural products has enabled the profitability we have reported.”
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