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High Street

‘Weak consumer environment’ hits Card Factory profits

Card Factory has announced that a “weak consumer environment” has had a negative impact on pre-tax profits.

The gift shop chain posted pre-tax profits of £22.7m during the six month period ending 31 July 2018, down 14% compared with the previous year. This is despite a total sales increase of 3% to £185.3m.

Like-for-like sales decreased by 0.2% which Card Factory attributed to “lower high street footfall in a weak consumer environment” leading to weaker sales in its ‘Everyday’ ranges. This was countered by what Card Factory called a “strong seasonal performance” with Valentine’s Day, Mother’s Day and Father’s Day ranges delivering record sales.

It also noted strong growth in online sales on the Card Factory website as it delivered a sales growth of 85% and is on track to be profitable this year. It also announced an interim dividend of 2.9p and a special dividend of 5p per share.

Karen Hubbard, CEO at Card Factory, said: “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. Profitability was impacted by lower like-for-like sales, but we continue to largely mitigate the headwinds we face through various business efficiencies.

“Despite this difficult consumer backdrop, we have seen record numbers for Valentine’s Day, Mother’s Day and Father’s Day both in terms of volume and value. This strong seasonal performance gives us confidence for the key Christmas trading period.

She added that the board remain “confident the group will continue to make further strategic progress on new initiatives”.

Card Factory also reaffirmed its forecast for full-year underlying profit to come in between £89m and £91m after announcing it was to be lowered from £93.5m in August.

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