Card Factory profits decline despite uplift in sales
Card Factory has reported a decline in first half profits after its margins were impacted by the effects of the National Living Wage, investment in new lines, and increased stock levels due to Brexit contingency planning.
The six months to 31 July saw the greeting card retailer’s pre-tax profit drop by 14.4 % to £24.3 million. On an underlying basis, pre-tax profit was down 7.9% to £22 million.
Meanwhile, like-for-like sales climbed by 1.5% as in-store like-for-likes and online sales rose by 1.2%. and 25% respectively. Revenue was up 5.5% to £195.6 million in the period.
Karen Hubbard, Card Factory chief executive, said: “We have delivered a satisfactory sales performance in the first half of the year. A strong seasonal performance, which saw another year of record sales for both Valentine’s Day and Mother’s Day, was achieved against the backdrop of an increasingly challenging UK high street environment and consequent weaker footfall. The successful seasonal trading, combined with more sophisticated use of data and improvements to our customer experience, gives us confidence for the key Christmas trading period ahead. “
Following a successful trial across over 130 stores, Card Factory now has an agreement in place to supply half of Aldi’s UK stores with greeting cards from November 2019. It has also secured an exclusive partnership with Australian greeting card retailer The Reject Shop to supply its 360 stores with Card Factory branded cards from January 2020.
Looking ahead, Hubbard added: “Although the current economic uncertainty continues to impact consumer confidence, we remain positive about the resilience of the card market, the strength of the Card Factory business model, and our growth opportunities for the business over the medium term.”
