Card Factory HY profits fall 43% amid rising wages

Card Factory has reported that adjusted profits before tax fell by 43% to £14.5m in the six-month period to 31 July, due to “substantial” increases in National Living Wage as well as freight inflation and the phasing of strategic investments. 

This comes despite group revenues rising by 4.9% to £238m during the period, which the retailer attributed to its continued growth strategy. 

During the half-year period, like-for-like revenues rose by 3.7%, as Card Factory focused on developing its store estate and its quality and value offer. 

This performance is said to be ahead of the broader celebration occasion market and the non-food retail sector. 

Meanwhile, gifts and celebration essentials sales rose by 6% like-for-like, and was a key driver of revenue growth as Card Factory continued to introduce new and expand existing gifting categories. 

Cardfactory.co.uk revenues also rose 8.8% and continues to build on the “encouraging” traction seen in H2 FY24.

Darcy Willson-Rymer, CEO of Card Factory, said: “I am delighted to be reporting further progress against our growth strategy with this resilient underlying performance in the first half of the year. We continue to deliver against our strategic priorities at pace thanks to the commitment and dedication of our colleagues.

“During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards. Together with the exciting partnership initiatives we are announcing today, we are helping more customers in more places celebrate life’s moments.”

He added: “As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business.”