Thorntons Plc share price down, CEO Hart to step down in June

Troubled British chocolate maker Thorntons announced on Monday the resignation of Chief Executive Officer Jonathan Hart after months of declining sales and execution issues.

The Derbyshire-based company said Mr. Hart would leave on June 27th and current Chief Operating Officer Barry Bloomer will assume the role of interim CEO until a replacement is found.

During his four-year tenure, Mr. Hart tried to revive the 104-year-old company by revamping its range and shifting focus to growing sales in its lower-margin but higher volume fast-moving consumer goods channel, supermarkets and online, while cutting costs by closing some 120 high street stores.

The strategy seemed fruitful as the company announced in September a 60% jump in annual profit, but the upbeat result was largely due to cost reductions, whereas sales grew anemically.

Thorntons issued a profit warning a day before Christmas Eve, saying that full-year profit would decline due to weaker-than-expected orders by major supermarkets and as issues at a new centralized warehouse had led to lost and late orders.

On March 2nd, the company said that profit in the half year ended January 10th 2015 slid to 6.5 million pounds from 7.2 million a year earlier, while revenue fell to 128.2 million pounds from 139.7 million in 2014.

On April 29th, following a continued drop in sales across all channels, the company issued a trading update for the third quarter which once again showed mixed results, spurring speculations of possible changes in leadership.

“Looking ahead to our fourth quarter we remain cautious about the outlook for the full year and continue to maintain strict control of costs as the economic situation is still challenging for many of our shoppers and trade customers,” Mr. Hart commented in the trading update.

The report showed that like-for-like sales at the Retail division were almost flat at +0.1%, albeit achieving a 1.5% growth year-to-date, while sales at the FMCG division tumbled 6.1%.

Paul Wilkinson, Chairman of Thorntons, said on Monday: “Over the past four years Jonathan has turned around our Retail business, as well as creating and delivering the vision and strategy that will serve as the platform for the continued transformation of Thorntons into an international consumer goods business. On behalf of the Board, I would like to thank Jonathan for his significant contribution and wish him well for the future.”

Thorntons Plc traded 2.07% lower at GBX 93.03 per share at 09:36 GMT in London, marking a one-year drop of 7.43%. The company is valued at 65.47 million pounds. According to the Financial Times, the 2 analysts offering 12-month price targets for Thorntons Plc have a median target of GBX 89.50, with a high estimate of GBX 91.00 and a low estimate of GBX 88.00. The median estimate represents a 5.79% decrease from the previous close at GBX 95.00.