Card Factory profit declines despite increase in sales
Card Factory has seen its first half revenue increase by 5.9% to £233.8 million as it continues to implement its growth strategy.
However, the greeting card retailer’s adjusted pre-tax profit declined by £7.6 million to £14.5 million due to higher costs resulting from freight inflation, the phasing of strategic investments, and increases in the National Living Wage.
Card Factory said the sales performance in the six months to 31 July was driven by a focus on developing its store estate and offering customers quality and value.
Categories performing particularly well included gifts and celebration items where like-for-like sales grew by 6%.
Total store revenue was up 6.1% in the period after the opening of 15 new stores in the UK and Republic of Ireland. Online sales at cardfactory.co.uk also rose, with growth of 8.8%, following investment in the customer experience and range development.
Darcy Willson-Rymer, chief executive of Card Factory, said: “I am delighted to be reporting further progress against our growth strategy with this resilient underlying performance in the first half of the year. We continue to deliver against our strategic priorities at pace thanks to the commitment and dedication of our colleagues.
“During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards.”
Card Factory said it has been trading in line with the first half since the period end with preparations for the busy Christmas season well advanced.
Willson-Rymer added: “As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business.
“Our strategic growth ambitions are underpinned by a robust balance sheet and strong cash flow, alongside our disciplined approach to managing working capital and focus on driving efficiencies and productivity across the business.”
Card Factory has also announced that it has signed a multi-year agreement with Aldi to enable it to become the exclusive everyday greeting card supplier across the supermarket’s full UK and Republic of Ireland stores estate. Cards will appear in-store from the end of September.
It is also in advanced discussions to renew multi-year agreement with The Reject Shop in Australia, which will include expanding to a full-service model.
