Card Factory reports ‘challenging’ Christmas and prepares for a rocky year
Wakefield-headquartered listed retailer has said its Christmas trading was ‘challenging’ and that it is preparing for a difficult year ahead.
Reporting in the 11 months to 31 December 2018, the firm said its year-to-date Group revenue growth stood at +3.4% (2018: +5.9%). The Board’s expectations for underlying EBITDA for the full year remain unchanged since its announcement in November, between £89m and £91m.
YTD Card Factory like-for-like sales was “broadly flat” at -0.1% (2018: +3.0%), said the firm. During the year, it continued its store roll out with 51 net new UK stores opened YTD.
Its online division, cardfactory.co.uk delivered YTD revenue growth of +59.1% (2018: 65.8%) and reflected a strong Christmas trading period
But its Getting Personal YTD revenue declined by -7.8% (2018: +1.0%).
Karen Hubbard, Card Factory‘s Chief Executive Officer, said: “The Christmas trading period was challenging due to lower high street footfall. However, Card Factory performed robustly in this competitive trading period. As a result, like-for-like store sales have remained consistent and in line with our quarter three update in November.
“Although the Group has faced significant cost pressures in the year, these have reduced and we have been able to take mitigating action to maintain robust gross margins.
“Whilst we expect ongoing challenges from the consumer and macro backdrop, we continue to lead the market with our proposition, underpinned by our ongoing investment in our unique vertically integrated model which provides our business with significant competitive advantages.”
Card Factory added: “Assuming a steady state, we anticipate that the foreign exchange headwind should dissipate in FY20. We continue to mitigate a large proportion of expected cost challenges, including National Living Wage and electricity wholesale prices, which will result in £5-6m of additional costs.
“In light of the current consumer and macro-economic backdrop, we anticipate that FY20 will be another difficult year.”
Card Factory said its Getting Personal division continued to face a market environment defined by heavy discounting and increasing cost of customer acquisition. “The business is focused on delivering profitable sales via lower cost acquisition channels and continues to be a profitable contributor to the Group,” it added.
