Thorntons failed to meet expectations as it endured a poor Christmas in the face of tough competition.
The chocolatier recorded a worse-than-expected fall in like-for-like sales of 4.2% in the 14 weeks to January 7. Total sales increased by 0.6% to £83.7m.
The business, which issued a profit warning last month, expects “continued weakness” in the market in 2012.
As a result of a combination of store closures and a continuing tough retail environment, own store sales declined by 6.8% to £44.9m. Online sales at the retailer grew 13% year-on-year.
Basket size and average transactions were down at the retailer as customers were “very selective”.
Thorntons also said Michael Killick, previously chief financial officer at clothing group Peacocks, will join the company as its new finance director, to replace Mark Robson who steps down in February.
Thorntons’ chief executive Jonathan Hart said: “Overall sales grew 0.6% in an extremely tough retail environment.
“While this was below our expectations, we nevertheless sold more chocolate in the quarter than ever before, reflecting the continued strength of the Thorntons brand with our customers and the growth in market share in the commercial channel.
“The continued decline in sales from our own stores and franchises was consistent with the wider retail pattern experienced in the high street.”
Hart said there has been a “high level of promotional activity” across the market with over 75% of products on promotion which hit margin and profitability in the first half of the year.
He added: “We expect continued weakness in consumer sentiment throughout 2012.
“This reaffirms our strategy to rebalance the business, create a smaller retail estate, revitalise our brand and most importantly restore profitability over the next three years. We are confident that we have the strength and resources to deliver it.”
The company said it is confident of its spring and Easter products. Last year the retailer enjoyed an increase in sales of 2.9% in the 14 week to April 30 2011, up on 1.9% in 2010 and Hart expects similar growth this Easter.
Thorntons will next update on performance in its interim statement in February.