Card Factory cuts profit expectations after weak UK store sales
Pressures facing UK consumers have persisted as the business entered its peak trading period, leading to the revised outlook
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Card Factory has lowered its profit expectations to between £55m and £60m after weaker-than-anticipated trading in its UK stores, citing continued pressure on consumer confidence and subdued high street footfall.
The greeting cards and gifts retailer said trading conditions had remained challenging in recent months, with cautious consumer behaviour affecting sales during what is typically its most important period of the year. As a result, UK store sales have fallen short of the company’s earlier expectations.
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On the assumption that current trends continue for the remaining seven weeks of its financial year, the company now expects to report adjusted profit before tax of between £55m and £60m for the full year.
The group said the pressures facing UK consumers had been widely reported and had continued to weigh on discretionary spending. These conditions have persisted as the business entered its peak trading period, leading to the revised outlook.
Despite the weaker UK performance, Card Factory said progress on its longer-term strategy had continued. It highlighted ongoing delivery of its Simplify and Scale programme, which is focused on improving productivity and efficiency as the business seeks to offset the impact of high inflation across the retail sector.
Performance in the group’s other operations, including those in the Republic of Ireland and North America, remains in line with expectations, it said. The integration of online card business Funky Pigeon is also continuing as planned.
The board said it remained confident in the group’s long-term strategy and financial position. It confirmed that the existing share buyback programme would continue and said it expects to declare a progressive full-year dividend, in line with its capital allocation policy.
Card Factory operates hundreds of stores across the UK and has expanded in recent years into online and international markets, as well as a broader range of gifts and celebration products.
