Card Factory PLC (LON:CARD) has battled weak consumer confidence and kept sales growing by opening a raft of new stores in UK.
The FTSE 250 greetings cards retailer's like-for-like revenues declined 0.3% in the three months to the end of October, cutting overall LFL growth so far this year to 0.9% in what it said remained “a challenging UK high street environment”.
Karen Hubbard, Card Factory's chief executive officer, said full-year profits would be “broadly in line with previous expectations”, as the “underlying card market remains resilient despite continuing weaker consumer confidence”.
An increased average spend per customer, said Hubbard, allowed the company to “substantially offset the effect of the lower high street footfall experienced in the quarter and the corresponding impact on our like-for-like sales”.
Total revenues over the nine-month period were up 5%, reflecting the contribution from new stores and growth in its online offering and what it felt were the “steady” LFL sales.
Card Factory offset the LFL decline by opening a 12 net new UK and Republic of Ireland stores in the quarter, a net 38 for the year, taking the total stores to over a thousand, with 12 more shops expected to open before the year’s out.
Time has passed for cards in the post
"News that rival Clinton Cards is considering shop closures as part of a survival plan may provide a small benefit to Card Factory," said Russ Mould, investment director at AJ Bell.
"Yet this is also an indication of how tough life is for many retailers" added Mould, saying that "the tradition of sending Christmas cards by post seems to be in decline so Card Factory will have to push ancillary items more, such as wrapping paper, sticky tape and gift boxes, in order to keep driving up sales".
Away from the rather gloomy high street, the website stormed ahead with sales growing at 16.2% in the quarter against a tougher prior year comparative, with a new platform and website expected to launch later this year.
The shares were down 2% to 152.3p on Thursday morning.