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Card Factory FY profits decline; 10% of stores to reopen mid-June

By Michele Maatouk

Date: Tuesday 02 Jun 2020

Card Factory FY profits decline; 10% of stores to reopen mid-June

(Sharecast News) - Card Factory posted a drop in full-year profit on Tuesday as it announced the reopening of around 10% of its stores in mid-June.
In the year to the end of January 2020, pre-tax profit fell 4.4% to £65.2m, with revenue up 3.6% to £451.5m. Like-for-like sales declined 0.5%, compared to a 0.1% fall the year before, reflecting "weak consumer confidence and high street footfall decline in the second half".

Card Factory pointed to a weak performance over Christmas, which it attributed to the macro backdrop, a reduction in demand for single and boxed cards and "some execution issues".

The online segment was a bright spot, however. Since lockdown, LFL sales at cardfactory.co.uk have risen 302% and are up 153% in the year to date. Meanwhile, gettingpersonal.co.uk saw LFL sales grow 68% since lockdown and 27% YTD.

Card Factory said it was not appropriate to provide financial guidance for FY21 given the uncertain economic backdrop.

Chief executive Karen Hubbard said: "We delivered a reasonable sales performance in a challenging year for the high street, growing both our volume and value card market share in the mature and stable UK greeting card market. Our profitability was, however, impacted by a number of recurring cost pressures and other one off operational costs which we were not able to fully mitigate."

The company said it plans to reopen around 10% of its stores from 15th June.

"It is clear that in some shops social distancing will impact the number of transactions that we are able to deal with; however our teams are looking to introduce innovative ways to process customer transactions to optimise sales in stores including helping customers reduce the frequency of their visits, but increase the average basket value in each shop," it said.

At 0945 BST, the shares were down 0.7% at 40.74p.

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