Broker FinnCap has slashed its forecasts for Thorntons following the chocolatier’s strategy and trading update earlier this month.
The broker, advising sell, cut its pre-tax profit expectation for this year by 11.4% to £3.3m and for 2012 by 42% to £2.4m.
Analyst David Stoddart said Thorntons’ strategy “marks a sensible response to structural challenges facing the business” but feared that maintaining the balance sheet will be difficult and short-term headwinds will make it harder for the strategy to gain traction.
He said: “Thorntons’ own-store operation was unsustainable, partly because of its own limitations but mainly owing to structural changes affecting high street retailers.”
He said Thorntons’ strategy recognised the critical changes in the market, but said: “We are yet to be persuaded the plan is sufficient to offset tough trading conditions.”