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Move Over Snow: Company Blames Warm Weather For Profit Warning
Just because snow is so February, here comes UK chocolate maker Thorntons with a new spin on an old scapegoating technique. See: they took the whole "blame it on the snow" so popular in America in Q1, and flipped it on its head. Brilliant. Guardian reports: "Chocolate maker Thorntons has hit the market with its second profit warning of 2011, blaming the recent sunny weather for a slump in sales over Easter. While most of the retail sector has welcomed the mini-heatwave that bathed Britain for much of April, it proved bad news for Thorntons. Sales of eggs and other products fell by over a fifth during Easter week, compared with a year ago." Not to be outdone, expect many comparable warnings from US companies which will now find any environmental and climatic "stunners" for earnings plunges: full moon, low tide, concerns about locust invasions, "that time of the month", etc.
From the Guardian:
Thorntons brought forward its latest trading update to Tuesday morning, after calculating that profits for this year could be just half of the City's estimates.
The warning came just four months after the company blamed December's snow for a disappointing performance over Christmas. Jonathan Hart, Thorntons' chief executive, said the company had been faced with "unprecedented weather conditions" during its two key trading periods.
"The past quarter has been extremely challenging particularly in our own stores and for franchisees and we foresee the prospect of this weakness in high street footfall and spending continuing," said Hart. He added that Thorntons had tried to cushion the impact of the warm weather by selling ice-cream at more stores, but this could not compensate for the drop in demand for chocolate.
Like-for-like sales at Thorntons' own stores fell by 12.6% over the last 16 weeks, while trading at its franchises slumped by more than a fifth. Other sales – mainly through supermarkets – were much stronger and rose by 25%, but these "commercial sales" make up less than a third of Thorntons' total turnover.
So far this year, Thorntons' comparable sales are 7.5% lower than a year ago. Hart, who joined the firm in January, has promised to deliver a strategic review to turn its prospects around. This is expected to include closing some of the company's 600 stores.
Shares in Thorntons dropped more than 10% to 71.5p on Tuesday.
Shockingly, not everybody is an idiot:
Some City analysts questioned whether Thorntons could blame its poor sales entirely on the warm weather.
"It was very pleasant this Easter on the Côte de Mersey but we're not so sure that the British avoided higher end chocolate ovals because of rocketing temperatures as opposed to households counting their pennies in tough times – chocolate has become much more expensive – and the questionable health credentials of confectionery taking further hold on parents," said Clive Black of Shore Capital.
Nick Bubb of Arden Partners said that supermarket sales of Easter eggs would have remained firm, thanks to the appeal of "one-stop shopping".
"The problem may be one of lost market share as much as a weak market," said Bubb, who agreed that the recent weather was "more conducive to barbecues and picnics than scoffing chocolates".
Then again, with Wall Street making an artform of sticking one's head in the sand and ignoring the glaringly obvious, even this completely bullshit excuse may fly when brought to the other side of the Atlantic as soon as a few weeks from now.
h/t Steve
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Is there no end to the madness?
Not with the current 6-planet alignment, apparently.
Here you go:
http://www.youtube.com/watch?v=ETgk56xT4Mk
Godiva bitches!
How about: "The dog ate my homework"?
Dollar getting smoked, markets down, silver down, gold down, oil down. Denzel must be peeping through the looking glass laughing his ass off.(ref deja-vu)
Good movie, better than I expected.
That time of the month is ALWAYS a viable reason.
Blaming bernanke, (monetary policy) or the US strong dollar policy, well clearly those are just dumb clearly non viable excuses.
Is this like blaming increased tornadoes on global cooling in the 70s, but then blaming them on global warming today?
http://stevengoddard.wordpress.com/2011/05/03/1974-climatologists-blamed...
do they have an award ,that they are all trying to win by, coming up with the most outrageous
My nephew gets in legal trouble and he blames the beer. Maybe that will be Bud/busch coming excuse.
Honest... I ran out of gas. I... I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake. A terrible flood. Locusts! IT WASN'T MY FAULT, I SWEAR TO GOD!
LOVE THAT MOVIE!!
bad weather = bad sales
good weather = bad sales
So mathematically speaking, bad weather = good weather...that's heavy!
Move to the front of the class Junior. For your next assignment, please prove 1=0 and you can become Treasury Secretary.
If that's the reward, I think I'll pass on attempting the proof.
Ah, what the hell...
Tax Liability = Taxes Paid
Tax Liability = 1
Taxes Paid = 0
Therefore, 1 = 0
When can I start?
I get paid twice a month so I have two built in excuses for poor performance. :>)
Mother's day is going to be the only holiday left standing.
Mother's day bitches!!
Looks like a lot of moms will be getting discounted chocolate bunnies this year.
It's pretty much just chocolate in name only anyway.
Jeez...is it so hard to figure out what happens when you just have a price spiral without the wages?
Shit costs more, sales go down...eureka?
I know anytime I look at chocolate items I quickly recoil in horror at the cost, and grab something more reasonably priced.
Obama should invade the Ivory Coast in order to support our god-given rights to cheap chocolate.
Our American Way of Life in non-negotiable!
He added that Thorntons had tried to cushion the impact of the warm weather by selling ice-cream at more stores, but this could not compensate for the drop in demand for chocolate.
Damn it! It was hot...but not hot enough. Of all the rotten luck.
The local municipal finance director got into trouble one time at a public meeting by jokingly hoping for a hot summer in order to meet revenue projections from their electric utility. Doh!
Two years later, that's what happened, and saved the next years budget. Hurray!
I am surprised "That time of the month" isn't used as a more frequent spin.
they should have blamed Bush and Cheney
Perhaps if Thorntons chocolate wasn't so expensive or their ice cream tasted nicer then I might be tempted to buy it.
They sell themselves as a luxury brand but really it's no better than Cadbury's
Mmm choclate ear wax. PUKE.
Tyler, don't forget all those tornadoes - they've got to be worth some spin, eh?
What do you expect if you let an accountant run the company.
I believe "that time of the month" would lead to higher chocolate sales