Card Factory PLC (LON:CARD) shares dropped on Thursday after the retailer said it was looking at changing its strategy to address long-term performance issues.
The FTSE 250 greetings cards chain said declining high street footfall, depressed sterling valuation and high-cost inflation are expected to continue over the next financial year to 31 January 2021 as well, hitting accounts by up to £10mln.
READ: Card Factory sales slip but new store roll-out continues
There will not be a special dividend in the coming financial year, it said, while adjusted underlying EBITDA guidance for the current year is now £81mln to £83mln, which analysts view as a 5% reduction compared to previous forecasts.
Like-for-like (LFL) sales declined 0.6% year on year in the 11 months to end-December, while website sales grew 15% to push total revenue up 3.6%.
No Christmas data
There were no separate figures for the Christmas period in Thursday’s update, aside from comment on “challenging” trading due to the general election and weak consumer sentiment hitting high street footfall.
The company is pinning its hopes on partnerships, having completed the roll out of its agreement with Aldi to supply a range of cards to 440 UK stores, while it continues a trial in 15 Matalan shops and prepares the launch in Reject Shop Ltd's (ASX:TRS) 360 stores in Australia.
“Disappointing but sensible”
Liberum said LFL sales decline over November and December may have been up to 3% and the statement was “disappointing”, although eliminating a special divi in 2021 is “sensible” to protect the group’s financial health.
“We are hopeful of further updates on the retail partnerships the group is undertaking (ALDI, The Reject Shop) at the prelims, which should provide some incremental positive news,” analysts said in a note.
Shares plunged 19% to 113.2p on Thursday at the opening bell.