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Card Factory post mixed Christmas results

New store rollout drives revenue growth up 3.4% despite tough conditions

 

CARD Factory have revealed a marginal slip in Christmas sales but maintained they are on track to meet earnings expectations for the current year.

In their latest trading update for the 11 months to December 31, the retailers said they had a “robust” Christmas trading period despite recording a 0.1 per cent slip in sales for the period.
The figures released yesterday, Thursday, January 10, show like-for-like sales across their store estate were also down 0.5 per cent, however, Card Factory said this was offset by online sales skyrocketing by 59.1 per cent – although this was a slight slowdown of the 65.8 per cent growth during the same period last year.
The value retailers said like-for-like trading reflected the continuing weakness in consumer demand experienced across the retail sector in the run-up to Christmas.
Meanwhile, year-to-date group revenue growth increased 3.4 per cent compared to the 5.9 per cent increase the prior year, which Card Factory said was creditable revenue growth, driven primarily by a rollout of 51 net new stores.
The Christmas trading period was challenging due to lower high street footfall, but chief executive Karen Hubbard said: “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.”
Card Factory added that the board’s expectations for underlying EBITDA for the full year remained unchanged at £89million-£91m, but they predicted the 2019/20 financial period would be another difficult year, and expect EBITDA to be broadly flat based on limited sales growth.



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