Strong performance sees store sales rise too while online dip is ‘as anticipated’
Profits at Card Factory have soared 72.7% to £24.7million in the greeting card retail giant’s half-year results released yesterday, 26 September – with store sales growing by 10.5%.
The interim results for the six months to 31 July, 2023, show group revenue was £220.8m, up 11.5% on the same period a year before, reflecting “continued good momentum” particularly in the core stores business.
Card Factory ceo Darcy Willson-Rymer said: “We are delighted to announce a strong performance in the first six months of this year. We continue to build the key foundations for growth through the delivery of our Opening Our New Future strategy.
“Our value and quality proposition and the strength of our store estate resonates with customers and positions us well to navigate the challenging economic backdrop in the run up to the Christmas trading season.”
With profits rising from £14.3m in the first half of the 2022-2023 financial year, to £24.7m, store sales grew by 10.5%, which the group said reflected its value and quality proposition, store range and layout developments and the annualisation of targeted price increases.
Another key driver in revenue growth came from its gifts and celebration essentials, where sales rose by 13.1% on a like-for-like basis and there was continued growth in its greeting cards offering, which saw sales grow by 7.7%.
Trading since the previous update early last month has been in line with the board’s expectations, and the report stated: “Given the combination of good trading momentum across the business and the successful delivery against our strategic initiatives, we remain confident in the long-term financial and operational targets.”
However, the retailer said online sales dropped 13.1% “as anticipated”, reflecting its investment phase on this channel and the “continued rebalancing of retail sales between online and in store across the sector”.
It said there had been positive progress in partnerships with total revenue of £6.4m, including a 23.5% increase from existing partnerships plus £2.2m from SA Greetings, the South African retail group it acquired earlier this year, and the new agreements signed with Matalan in the UK, as well as Liwa Trading Enterprises in the Middle East where it has opened its first four Card Factory-branded stores in Abu Dhabi and Dubai.
Looking ahead, the group said that with its strong first-half performance, together with its current outlook for the second half, it is “confident” in delivering a good outturn for the year.
The period covered has seen the start of Card Factory’s Store Evolution Programme, and the completion of the UK click and collect rollout with “early indications this is contributing to in-store revenue growth”, while 11 new stores have been opened in Britain and Ireland.
Darcy added: “Continued leveraging of the insights gathered from our investment in customer data is enabling us to evolve and optimise our store formats and ranges across cards, gifts and celebration essentials, all underpinned by our discipline in maintaining a resilient financial position.
“I would like to thank colleagues across the Card Factory business for their ongoing dedication in delivering on our strategic building blocks of growth. We continue to focus on the delivery of our long-term targets and in achieving our ambition of becoming a market leading omni-channel retailer of cards and gifts.”