Card Factory's profits have fallen despite growth in sales

In the six months to July 2024, Card Factory’s adjusted profit before tax fell £7.6m to £14.5m, which the retailer said reflected “substantial increases in National Living Wage, plus freight inflation and phasing of strategic investments.”

Total sales grew 5.9% to £233.8m while like-for-like sales were up 3.7% “driven by our focus on developing our store estate and our quality and value offer.”

Online sales grew 8.8% in the same period building “on the encouraging traction seen in H2 FY24.”

The specialist card retailer has signed a multi-year agreement with Aldi to be the exclusive everyday greeting card supplier across the full UK and Republic of Ireland estate as well as entering the US market with a wholesale partnership as it expands overseas.

It’s also in advanced discussions to renew a multi-year partnership with The Reject Shop in Australia, and completed the acquisition of Garlanna, a publisher and wholesaler of greetings cards, wrap and gift bags in the Republic of Ireland in September.

The retailer said: “As previously guided, the benefit of our strategic investments and robust programme of productivity measures and efficiency savings in FY25 are weighted to the second half of the year and we have already seen these positively impact the cost base.”

Darcy Willson-Rymer, chief executive officer, said: “During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards. Together with the exciting partnership initiatives we are announcing today, we are helping more customers in more places celebrate life’s moments.

“As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business.

“Our strategic growth ambitions are underpinned by a robust balance sheet and strong cash flow, alongside our disciplined approach to managing working capital and focus on driving efficiencies and productivity across the business. Moving forward, we believe we are well placed with a strong proposition that resonates with a broad customer base and delivers an unrivalled quality, value and choice offering.”