Moonpig lowers sales forecasts amid ‘challenging’ pre-Christmas trading

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Moonpig has reduced its full-year sales forecasts after turbulent trading conditions hit its top line.

The online greetings card specialist said the market had “become progressively more challenging” in October and November, and cautioned of “continued macroeconomic uncertainty”.

As a result, Moonpig said full-year sales were now likely to come in at £320m, compared to the previous guidance of £350m.

Despite the anticipated dent in its top line, Moonpig insisted its expectations for adjusted EBITDA were unchanged.

Moonpig delivered the updated forecast alongside its interim results covering the six months to October 31.

The etailer suffered a 51.3% slump in reported pre-tax profit to £9.1m – a figure that was also 3.2% below pre-Covid levels.

Adjusted pre-tax profit fell 21.6% to £18.9m, while adjusted EBITDA slipped 1.2% to £34.6m.

Group revenue was flat at £142.8m, despite the addition of £11.7m in sales from the acquisition of experiences businesses Red Letter Days and Buyagift in July.

Moonpig said its decline in pre-tax profit partly reflected interest on financing for that deal, as well as the amortisation of investments in its tech platform.

The business insisted it had “significant runway” for future growth in a greetings card market that had a “long track record of stability and resilience through recession”.

Moonpig chief executive Nickyl Raithatha said: “As the clear online leader in greetings cards, Moonpig Group is positioned to benefit as the market continues the long-term structural shift to online.

“Our resilient business model offers a powerful and unique combination of leading market positions, strong customer retention, high profitability and robust cash generation, giving us the flexibility to manage through the economic cycle. As a result, our expectations for profit for the current financial year remain unchanged.”

He added: “Despite the difficult trading environment, we have delivered a robust set of results and with our data-led model we are ideally positioned to capture the significant long-term opportunities in our markets.”