Positive sales quarter for listed Card Factory

15 November 2018

Positive sales quarter for listed Card Factory

Wakefield-headquartered listed retailer Card Factory has seen group revenue during the night months to 31 October increased by +3.4% (2018: +6.7%).

In a trading update this morning, the company said that during Q3, store LFL sales of +0.1% improved the year-to-date store LFL to -0.5%, “reflecting an improvement in the performance of our core Everyday Card product category and increased average spend.”

Its website sales grew +47.3% in the third quarter, bringing YTD Card Factory website growth to +70.9%. Including the  growth delivered by the Card Factory website, overall Card Factory LFL performance for the quarter was +0.4%.

Sixteen new UK stores were opened in the third quarter, bringing UK store openings to 41 with one new store in Republic of Ireland. As a result, the total number of stores as at 31 October was 963 including seven trial stores in Republic of Ireland. Card Factory said: “The business remains on track to deliver approximately 50 net new UK stores in the current financial year and has a solid pipeline of new store opportunities for the next financial year.”

Card Factory added: “Getting Personal continues to face a market environment defined by heavy discounting and increasing customer acquisition costs. The business is focused on delivering profitable sales via lower cost acquisition channels, and continues to be a profitable contributor to the group.”

As at 31 October, net debt, before deduction of capitalised debt costs, totalled £172m (2018:  £156m). The £12.2m increase since the FY19 interim results reflects the planned build-up of stock for the forthcoming Christmas trading period.

A 2.9 pence interim dividend and 5 pence special dividend announced on 25 September, amounting in total to £27m, will be paid to shareholders on 14 December.

 Karen Hubbard, Card Factory’s Chief Executive Officer, said: “Despite the continuation of challenging high street trading conditions, we delivered positive LFL sales in the third quarter, marking a slight improvement on the LFL performance seen in the first half. This reflected further growth in average spend and improved performance of our redesigned Everyday ranges, in addition to our growing Card Factory online business.

“The business faces reduced, but ongoing, external cost pressures such as national living wage and foreign exchange-related input cost increases; the latter is expected to ease in FY20. We remain focused on mitigating these headwinds with our ongoing programme of business efficiencies.

“Given our new ranges and our seasonal performance to date, we approach our Christmas trading period with confidence.  We also remain positive about the growth prospects for the business over the medium term.”