Card Factory warns of high street drag on profits

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Card Factory on Tuesday warned challenging conditions on the high street had continued to drag on its profits.

The greeting card chain said underlying pre-tax profit fell 14 per cent to £22.7 million in the six months to July 31.

Like for like sales dropped 0.2 per cent amid a “difficult consumer backdrop” for the business, although total sales were up 3.2 per cent to £185.3 million for the period, thanks to a record Valentine’s Day, Mother’s Day and Father’s Day.

“We have delivered solid interim results with overall sales growth, despite the weak consumer environment and particularly challenging footfall across the high street, driven by various factors,” chief executive Karen Hubbard said on Tuesday.

“Profitability was impacted by lower like-for-like sales, but we continue to largely mitigate the headwinds we face through various business efficiencies,” she added.

The announcement comes after it saw shares drop 20 per cent following a profit warning at the start of the year.

Then just last month Card Factory cut its full-year profit guidance off the back of extreme weather and weak consumer demand.

The business reaffirmed its forecast for full-year underlying profit to come in at a range of £89 million and £91 million after lowering it in August.

This compares to the previous estimate of £93.5 million.

Card Factory cited poor weather conditions and “uncertainty around the UK consumer environment” on the fall, adding that its current guidance would depend on its performance for the final three months of the year.

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