1In 2-quart heavy saucepan, melt butter over medium heat. Cook and stir shallots in butter 7 to 10 minutes or until butter and shallots are deep golden brown. Stir in flour, salt, thyme and pepper. Continue to cook and stir 1 minute.
2Gradually stir in sherry and chicken broth. Heat to boiling, stirring constantly; reduce heat to low. Cook and stir about 5 minutes longer or until gravy is thickened and flavors are blended.