Card Factory leaves guidance unchanged despite slide in first-half profits

(Sharecast News) - Retailer Card Factory reiterated its outlook for the critical second half on Tuesday, despite the hot summer weather and increased investment weighing on interim earnings. The cards and celebrations specialist saw revenues rise 5.9% in the six months to 31 July, to £247.6m, while like-for-like store revenues sparked 1.5%.

But adjusted earnings before interest, tax, depreciation and amortisation softened 2.4% to £44.2m, while pre-tax profits fell 9% on the same basis to £13.2m.

Card Factory attributed the fall to increased "efficiency-focused" investments, including a new point of sale till system.

It also said high street footfall had been weaker due to the unusually hot weather. Online sales, meanwhile, slid 11.3%, as it moved to a higher-margin offering.

However, looking ahead and the retailer - which in August completed the acquisition of personalised card specialist Funky Pigeon - said it remained on track to benefit from both Halloween and Christmas.

"Despite the challenging consumer environment, our expectations for the first half remain unchanged," Card Factory said.

"While we are yet to trade through the peak period, our expectations for mid-to-high single digit percentage growth in adjusted pre-tax profits the 2026 full-year are unchanged."

Darcy Willson-Rymer, chief executive, added: "Our resilient first half performance against a challenging retail backdrop demonstrates the effective execution of our growth strategy and our ability to navigate inflationary pressures

"With the peak festive season ahead, we are well prepared for our most important trading period."

As at 0945 BST, shares in Card Factory were down 5% at 101.67p.

Peel Hunt, which has a 'hold' rating on the stock, said the first half was "largely" in line with expectations.

It continued: "There is no change to full-year guidance, which leads analysts to pre-tax profits of about £70m. There is a not a huge amount here that is new, and while the valuation for the shares in lowly, there's no catalyst currently for them to perform in our view."