Cost-of-living crisis will hit toy retailer’s all-important Christmas sales

Character Group, the Oldham-based toys retailer, warned today that it anticipates the cost-of-living-crisis will impact its 2023 financial results.

The company issued a trading update for its financial year ended August 31, 2022, ahead of the release of its results this December.

It said, as anticipated, the group’s sales momentum continued through the second half period and, despite adverse factors, such as continuing high freight rates and the increasing strength of the US Dollar, the board expects its underlying profit before tax to be broadly in line with current market expectations of around £11.275m.

The company has now entered its new financial year and is focused on the lead up to the all-important Christmas trading period.

It said the industry previews of its new product ranges and introductions for the 2023 season have been well received by customers and prospective customers alike.

However, given current macro-economic headwinds, including the weakness of Sterling and the expected curtailment of consumer spending in the lead up to Christmas due to concerns over cost-of-living increases, the group’s trading conditions remain challenging.

Against this economic environment, and although only one complete month into the 2023 financial year, the board believes the trading performance for the current financial year is unlikely to match the expected outcome for the year ended August 31, 2022.

But the group offered reassurances that it continues to trade profitably, has a strong balance sheet, is debt-free with a substantial cash balance and considerable unutilised working capital facilities.

Therefore, the board confirmed that it is committed to maintaining its progressive dividend policy.