Card Factory (LSE:CARD) PLC came up trumps with its full-year results statement with the share price surging after performance topped management’s expectations.
The specialist retailer of greeting cards, gifts, wrap and bags saw revenue rise 28.0% to £364.4mln in the year to the end of January 2022 from £285.1mln the year before, with store sales up 33% year-on-year (YOY), reflecting a 20% increase in trading days and recovery in market share.
Like-for-like (LFL) sales at Card Factory (LSE:CARD) stores were down 3.9% on the year to the end of January 2020 – a pre-Covid period – but store LFLs for the Christmas season recovered to near to pre-pandemic levels, the company revealed.
Profit before tax was positive at £11.1mln versus a loss of £16.4mln the year before, which the company said was ahead of expectations. Underlying earnings (EBITDA) rose 86.9% to £85.6mln from £45.8mln.
The retailer has seen a recovery in gross margins to 32% from 28% the year before, which it said reflected a realignment of inventory stock provision built in the previous financial year which became normalised in the financial year just ended, alongside improved stock management and reduction in aged stock provision.
Trading in the current financial year has been in line with management’s expectations and is contributing to the continued recovery of the company's market share position, Card Factory (LSE:CARD) said.
The cost of birthdays is set to rise. The Card Factory (LSE:CARD) said inflationary pressures have seen card prices already rising and higher price points are expected to last throughout the year.https://t.co/bEwTgwJbqx
— Greg Wright (@gregwrightYP) May 3, 2022
While taking into consideration inflationary headwinds as well as the levels of trading seen in the new financial year, the board's expectations for revenue and profit for the current year remain unchanged.
"We are pleased to report a robust performance for the year, ahead of our original expectations, alongside good progress on our strategic transition, despite the operational challenges the last year brought,” said Darcy Willson-Rymer, the chief executive officer of Card Factory.
“We saw a steady recovery in store performance as lockdown restrictions eased, particularly in the run-up to Christmas with store sales approaching pre-pandemic levels in this key trading period. As we reopened our stores, we saw our online performance decline slightly year on year; however, we remain greatly encouraged that our Card Factory online sales were significantly ahead of pre-pandemic levels. This year will see us make further progress in developing our customer proposition, through a broader product range and improved online experience, as part of our transition to a leading omnichannel retailer.
“Looking forward, we remain confident our revenue levels for next year will continue trending towards pre-pandemic levels. We have taken pre-emptive action to help mitigate the inflationary pressures we are seeing across the business and we will continue to monitor and respond to developing macro-environmental pressures. Our focus is on creating opportunities across our store estate while building out our wider capability which will allow us to deliver our strategic initiatives and drive growth at pace,” the CEO added.
Shares in Card Factory were up 10% at 64.6p in the first hour of trading.