Card Factory’s trading update for the nine months ending 31 October, showed a sales growth of 6.7%, compared to 4.4% for the same period in 2016. Interestingly though, the majority of this sales surge was not from cards, but from growth in non-card products (such as gifts and giftwrappings) which offer lower margin.
While the trading statement concentrates on sales and not the profit position of the value retailer, it remains buoyant about the future growth for the business.
The UK’s largest greeting card retailer, which claims to account for a third of all greeting cards sold in the UK, remains on track to open 50 new stores in the current financial year, with 38 opened so far, eight in this last quarter. This meant that as of 31 October, Card Factory was trading from 903 as at 31 stores.
Summing up, Karen Hubbard, Card Factory’s chief executive officer, said: “We have had good third quarter sales, continuing the momentum seen over the first half of the year, with strong growth in revenue from lower margin non-card categories, such as gifts and dressings.”
However, she admitted that trading conditions are not without challenges. “The business faces ongoing external pressures such as foreign exchange and national living wage, which will continue to impact our margin for the remainder of the year and into FY19, despite the mitigation initiatives we have put in place.”