Card Factory swings to interim profit as shoppers return to stores
By Michele Maatouk
Date: Tuesday 27 Sep 2022
(Sharecast News) - Card Factory said on Tuesday that it swung to an interim profit as a return to shopping in stores boosted revenues.
In the six months to the end of July, the company swung to a pre-tax profit of £14.3m from a loss of £6.5m in the same period a year ago, with revenues up 69.4% to £198m.
On a like-for-like basis, revenue was 4.1% higher, reflecting good momentum and a shift back to customers spending on the high street.
Store revenue rose 81.8% during the year and the card retailer hailed a strong performance for everyday products, with good growth in "celebratory life moments" reflecting a return to more normal lifestyles after the pandemic.
Sales on the website were down, however, as customers returned to stores, but remained higher than pre-pandemic levels.
Chief executive Darcy Willson-Rymer said: "We are pleased to report a strong performance through the half which reflects continued good momentum within the business, as well as the reversal of lockdown trends with customers choosing to return to the high street.
"The pronounced shift in spend back towards stores supports our continued conviction in the value of our store estate within our customer proposition and as an enabler in our omnichannel ambitions.
"Whilst we remain mindful of the challenging economic backdrop as we head towards the Christmas season, we feel well placed to navigate this and retain our focus on transitioning Card Factory to a market leading omnichannel retailer of cards and gifts."
At 0815 BST, the shares were up 2.4% at 46.50p.
Victoria Scholar, head of investment at Interactive Investor, said: "This is a strong set of earnings lifting Card Factory's share price thanks to a strong top and bottom line performance. The return to bricks-and-mortar shopping has been a big theme for the retailer post pandemic with a revival of in store shopping more than offsetting a decline in website sales. The greetings card maker will be pinning its hopes on a seasonal boost in the run up to Christmas to offset headwinds from the cost-of-living crisis which is squeezing household budgets and weighing on demand for consumer discretionary spending across the board.
"Pricing remains critical for Card Factory as it looks to compete with the likes of Moonpig Group and others for a slice of the available customer wallet. Shares have still struggled amid the market turmoil this year with Card Factory shedding over a fifth of its stock market value."
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