LONDON (ShareCast) - (Sharecast News) - Card Factory shares tumbled on Thursday as the retailer issued a profit warning after "challenging" Christmas trading.
The company said FY20 adjusted underlying earnings before interest, tax, depreciation and amortisation are expected to be between £81m and £83m, down from £89.4m last year. For 2021, the net impact of market headwinds on earnings is likely to be in the range of £5m to £10m, with declining high street footfall, depressed sterling valuation and high cost inflation set to remain a drag.

Chief executive officer Karen Hubbard said: "The Christmas trading period continued to be challenging given the general election and weak consumer confidence, the impact of which can be seen in the footfall decline experienced in the period.

"Our investment in our customer experience, operational efficiency and data to improve our ranges has helped us to mitigate some of the effects of the tougher retail environment and higher costs experienced in the year. We plan to invest further in the business, enhancing our ability to operate more efficiently, service new sales channels and increase our competitive advantage, enabling a return to profit growth after the next financial year."

In the 11 months to the end of December, revenue was up 3.6%, with like-for-like sales down 0.6%. Meanwhile, the company's website delivered 14.8% year-to-date revenue growth.

Independent retail analyst Nick Bubb said: "Having been looking for a victim of the very weak High Street footfall last month, we have found one at last, in the not unsurprising form of Card Factory.

"Today's update does not, unaccountably, spell out how bad Christmas was, but the cumulative LFL outcome of -0.6% for the 11 months to Dec 31st is a lot less than the +0.9% recorded at the nine-month stage."

At 1100 GMT, the shares were down 21% at 110.23p.

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