Profits have fallen at greetings cards and gifts retailer Card Factory despite rising sales, new results reveal.
The Wakefield-based chain, which operates a network of more than 1,000 shops in the UK, saw pre-tax profits fall 43.3% to £14m in the half year to the end of July compared with the same period last year, and operating profits fall 23.4% to £21.5m. The change in earnings came despite group sales rising to £233.8m, compared with £220.8m in the same period last year.
Bosses said it had been a strong performance during a challenging time for retailers with pressure on consumer spending and wet weather leading to reduced footfall on the high street. They pointed to like-for-like store revenue growth ahead of competitors in the celebration occasions market, driven by the spring celebrations of Mother’s Day, Father’s Day and Valentine’s Day – with the latter performing particularly well.
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Profitability was impacted by refinancing costs, as well as inflation of freight and labour costs. Shop opening costs, utilities, maintenance, point of sale and pay-per-click costs also played a part. Wider inflationary pressures were said to be easing into the second half of the year.
Despite the headwinds, Card Factory opened 15 net new stores during the period, including a fourth central London site in Cheapside. The business has ambitions to open more than 90 net new stores by its 2027 financial year.
Darcy Willson-Rymer, chief executive officer, said: “I am delighted to be reporting further progress against our growth strategy with this resilient underlying performance in the first half of the year. We continue to deliver against our strategic priorities at pace thanks to the commitment and dedication of our colleagues.
“During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards. Together with the exciting partnership initiatives we are announcing today, we are helping more customers in more places celebrate life’s moments.
“As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business. Our strategic growth ambitions are underpinned by a robust balance sheet and strong cash flow, alongside our disciplined approach to managing working capital and focus on driving efficiencies and productivity across the business. Moving forward, we believe we are well placed with a strong proposition that resonates with a broad customer base and delivers an unrivalled quality, value and choice offering.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
