British chocolatier Thorntons said sales over the Christmas period had been below its expectations and its profitability would be hit by heavy discounting, in a retail environment it called extremely tough.

Derbyshire-based Thorntons, which operates around 600 stores across the UK and employs more than 4,000 staff, said sales in its own stores declined in the 14 weeks to 7 January by 6.8 percent to 44.9 million pounds.

Sales at its franchise arm fell 17.5 percent to 4.1 million pounds.

Total sales of its products - including sales in supermarkets and other stores - increased marginally by 0.6 percent to 83.7 million pounds, below the company's expectations.

Thorntons also said Michael Killick, previously CFO at clothing group Peacocks, will join the company as its new finance director, to replace Mark Robson when he steps down in February.

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, the company said in a statement on Thursday.

Thorntons issued a profit warning in December as hard-up consumers stayed away from the 100-year-old group at one of its most important times of the year.

The company's shares plummeted 34 percent after its board said profits would fall short of expectations, having previously announced plans to shut a third of its stores.

Heavy discounting to lure in cash-strapped consumers hit margins for British high street retailers over the Christmas period.

There has also been a high level of promotional activity across the market, Thorntons said on Thursday. This has been evident across all our sales channels and has negatively impacted our gross margins and consequently profitability in the first half of the year as we stated in our December trading update.

Looking ahead, we have a strong spring range and our commercial sales orders for Easter are in line with our expectations, Thorntons added.

We anticipate continued growth within this channel by the year-end.

Shares in Thorntons opened down 15 percent to 12 pence on Thursday, the company's lowest share price on record.

(Reporting by Philip Baillie, Editing by Rosalba O'Brien)