Card Factory reported a significant drop in profits despite an increase in sales, attributed to rising costs.
- The retailer’s pre-tax profits fell by 43%, now standing at £14 million for the half-year period ending July 31.
- Sales saw a robust increase of nearly 6% to £234 million, indicating positive growth momentum.
- The company highlighted rising National Living Wage and freight inflation as key cost drivers.
- CEO Darcy Willson-Rymer remains optimistic, noting strategic moves and partnership initiatives to sustain growth.
Card Factory has disclosed a sharp decline in its profits, emphasizing that this downturn contrasts with a noticeable increase in sales. Despite the progress in sales, the company’s pre-tax profits dropped by a substantial 43%, recording a total of £14 million over the six months leading up to July 31.
The sales figures reflect an upward trajectory, experiencing nearly a 6% ascent to reach £234 million. This performance marks a positive step as the company pursues its growth strategy substantiated by sales momentum.
According to Card Factory, the notable decrease in profits is largely attributed to “substantial increases in National Living Wage” and “freight inflation,” compounded by strategic investments made during the period. This insight into operational costs reflects the broader economic pressures impacting the retail sector.
During this period, online sales and the sale of gifts and celebration essentials have seen growth, with an online increase of almost 9% and a 6% rise in categories related to gifts and celebrations. Such diversification efforts indicate the company’s proactive approach to expanding its market footprint.
Looking forward, the company maintains its full-year expectations, relying on the robust topline performance demonstrated in the first half and strategic measures to manage inflationary pressures. CEO Darcy Willson-Rymer remains confident in the company’s direction, citing “strong performance across our growing store estate” and the importance of gifts and celebration essentials as revenue drivers.
CEO Darcy Willson-Rymer expressed optimism, highlighting exciting partnership initiatives aimed at providing broader customer outreach. He stated, “Together with the exciting partnership initiatives we are announcing today, we are helping more customers in more places celebrate life’s moments.”
Card Factory persists in navigating economic challenges with strategic resilience and market growth.