High Street

Card Factory profits fall as footfall hits LFL sales

Card Factory has reported in its latest full-year results that profit before tax fell by 8.3% to £66.6m as its like-for-like sales stagnated with a 0.1% decrease.

The company attributed the fall in sales to a decrease in footfall across its 972 stores and a “tough consumer environment”. However its online sales surged by 56.3% as overall revenue for the full year ending 31 January 2019 increased 3.3% to £436m.

During the period, Card Factory opened 51 net new stores, including its first franchise store in Jersey adding it has a “strong pipeline of new store opportunities for FY20” as it “explores  other opportunities” to extend its reach beyond 1,200 stores in the UK and internationally.

The company also revealed that underlying earnings per share was 17.6p, down from 18.9p the previous year and that the total dividend per share was maintained at 9.3p.

Karen Hubbard, Card Factory CEO, 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. EBITDA for the year however, was impacted by lower footfall and Getting Personal’s disappointing performance.

“We continue to look to leverage our unique, vertically integrated model to improve our competitive advantage and drive margins. We have further initiatives planned for the current year which will bring further production back to the UK, whilst also implementing additional plans that will allow an improved focus on customer service in store.”

She added: “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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