Card Factory posts mixed Christmas results amid tough conditions

Card Factory
// Like-for-likes broadly flat, slipping a marginal 0.1%
// Revenue growth up 3.4%, driven by new store rollout

Card Factory has revealed a marginal slip in Christmas sales but maintained it was on track to meet earnings expectations for the current year.

The retailer said it had a “robust” Christmas trading period despite recording a 0.1 per cent slip in sales for the year to date ending December 31.

Like-for-like sales across its store estates were also down 0.5 per cent for the year to date.

However, Card Factory said the store like-for-likes was offset by online sales skyrocketing by 59.1 per cent – although this was a slight slowdown of the 65.8 per cent growth during the same period last year.

The retailer said like-for-like trading reflected the continuing weakness in consumer demand experienced across the retail sector in the run-up to Christmas.

Meanwhile, year-to-date group revenue growth increased 3.4 per cent compared to the 5.9 per cent increase the prior year.

Card Factory said this was creditable revenue growth, driven primarily by a rollout of 51 net new stores.

“The Christmas trading period was challenging due to lower high street footfall. However, Card Factory performed robustly in this competitive trading period,” chief executive Karen Hubbard said.

“As a result, like-for-like store sales have remained consistent and in line with our quarter three update in November.

“Although the group has faced significant cost pressures in the year, these have reduced and we have been able to take mitigating action to maintain robust gross margins.”

Card Factory said the board’s expectations for underlying EBITDA for the full year remained unchanged at £89 million-£91 million.

It also predicted that the 2019/20 financial year would be another difficult year, and expects EBITDA to be broadly flat based on limited sales growth.

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