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Card Factory posts drop in profit

Greeting cards retailer Card Factory has reported a decline in full year profits after trading was impacted by lower high street footfall.


Card Factory posts drop in profit

Greeting cards retailer Card Factory has reported a decline in full year profits after trading was impacted by lower high street footfall.

In the year to 31 January, pre-tax profit fell by 8.3% to £66.6 million as the retailer saw its like-for-like sales dip by 0.1%. Revenue increased by 3.3% in the period to £436 million.

Karen Hubbard, Card Factory chief executive, said: "We delivered a robust performance for the year, maintaining flat like-for-like sales despite a tough consumer environment. Our focus has been on continual improvements to our customer offer, producing better, more innovative ranges of everyday and seasonal cards and maintaining our quality and value positioning, while also being more efficient and driving savings across the business."

During the year, Card Factory opened a net 51 stores as it looks to reach a target of more than 1,200 stores in the UK and overseas. The retailer has also embarked on a trial with Aldi where its ranges have been made available in 112 stores.

Hubbard said: “Encouragingly, some initial trials with Aldi in the UK, in an Australian retailer, and with a franchise partner in Jersey show that the Card Factory brand is a footfall driver that has real resonance; we will pursue these types of opportunities to open new routes to market where we see attractive returns.” 

The retailer said its online business performed well in the period as it benefited from the development of an expanded product range. However, its website fared less well due to an increase in the cost of customer acquisition and "aggressive" discounting by competitors.  

Looking ahead, Hubbard said: "Whilst the new financial year is just two months old, we are satisfied with the start we have made and are particularly pleased with record seasonal performances from Valentine's Day and Mother's Day.  As previously stated, EBITDA for the forthcoming year is anticipated to be broadly flat year-on-year (excluding the impact of IFRS 16) in light of various external pressures, but we are confident we are laying the right foundations for future profit growth, whilst continuing to deliver healthy returns of cash to our shareholders."

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