The Card Factory has reported relatively weak first half results in what it described as a “challenging” retail environment.
In the six months ended 31 July 2016, the group’s total revenue increased by 4.8%, whilst like-for-like sales edged up just 0.2% compared to a 2.8% rise the year before.
It said that first quarter sales growth was softer than levels recently achieved with variability in retail footfall impacting weekly sales patterns. This trend continued in the second quarter, both in the lead up to and following the EU referendum.
Growth was driven by strong growth from its new website, and excluding the website, like-for-like sales performance for its store network was broadly flat at -0.1%
In the first half, Card Factory opened 34 net new stores, bringing its total estate to 848 stores. The group said it remains on track to open approximately 50 net new stores in the current financial year with all expected to be open in advance of the all-important Christmas trading period.
Karen Hubbard, Card Factory’s Chief Executive Officer, said: “As highlighted in our Q1 announcement, the retail environment in the first half has been challenging and, as widely reported, footfall patterns in the first half have generally been soft. Card Factory is not immune to these wider factors and our sales growth over the period was lower than our normal levels as a result.
“It is too early to assess the precise impact on overall consumer sentiment and retail footfall from the result of the EU referendum. However, we enter the second half with confidence in the quality and value of our offer, including our new Christmas range, and we will target improved sales growth in the second half.”
She added: “We remain as convinced as ever of the strong growth prospects for the business, and of our ability to deliver strong shareholder returns over the medium term. We are confident of delivering full year underlying profit before tax within the range of analysts’ current expectations.”