Card Factory has issued a profit warning as weak consumer confidence hits its festive season sales. The British greetings card retailer now expects an adjusted pre-tax profit between £55 million and £60 million for the current year, significantly below previous expectations of around £70 million.
The company blames persistent economic pressures on UK consumers that have dampened confidence and shopping behaviour during the crucial Christmas trading period. Card Factory said: «It is an inescapable fact that these pressures have impacted consumer confidence and shopping behaviour, contributing to soft high street footfall.»
The downgrade marks a sharp reversal for the retailer, whose shares had lifted since April on the back of resilient trading and progress in performance improvement plans. The company cited «ongoing high inflation» as a continuing challenge to its operations.
Strategy and outlook
Despite the profit warning, Card Factory's board maintains confidence in its long-term direction. The company said: «The board remains confident in the group's long-term strategy. The share buyback programme will continue and the board anticipates declaring a progressive full-year dividend, in line with its capital allocation policy.»
The retailer's productivity and efficiency programme continues as planned. Its integration of Funky Pigeon, the online card business acquired from WH Smith in July, remains «on track».
Card Factory's operations in the Republic of Ireland and North America are performing in line with expectations, providing some stability amid the UK challenges.
Note: This article was created with Artificial Intelligence (AI).
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