Card Factory's sales slow but expects Christmas boost

Card Factory’s sales slowed in the first half of the year due to lower footfall in the retail sector, but the FTSE 250 company expects sales to strengthen as Christmas approaches.

Sales growth slowed to 4.4% the nine months ended 31 October, compared the 4.8% growth in the first half of the year, and down from 7.9% at this stage last year.

First half sales growth was softer due to a lower retail footfall, but the company said while weekly sales patterns in the second half have varied, it has seen some improvement since October.

Chief executive Karen Hubbard said the general retail environment has remained challenging and the company remains wary of the uncertain outlook for consumer confidence.

"We enter the important final quarter with an excellent Christmas offering, both in our card ranges and an expanded choice of seasonal gifts. Whilst it is always difficult to forecast short term footfall trends, we remain confident that the quality and value of our extensive range will continue to appeal to consumers."

The company maintained its expectations for full year pre-tax profit.

During the period 46 new stores were opened, bringing the company’s total to 860, and it is confident of delivering another year of about 50 new store openings in the next financial year.

Year-on-year sales at gettingpersonal.co.uk, the company's personalised gift website, were flat but there was an improvement in average spend, which offset lower visitor numbers.

For the website the company targets a medium term sales growth of at least 10% per year and it has made management changes recently in order to drive sales and profit.

Its other website, cardfactory.co.uk, has continued to grow from a low base.

At the end of October, before deduction of capitalised debt costs, net debt widened by 11% to £128.6m due to a build-up of stock for the Christmas trading period.

The 2.8p interim dividend and 15p special dividend announced will be paid on 25 November.