Budget greetings card retailer Card Factory said it has maintained flat like-for-like sales despite a tough consumer environment.
The Wakefield-based group reported 3 per cent rise in revenue to £436m in the year to January 31 although pre-tax profits fell 8 per cent to £66.6m.
Card Factory opened 51 new stores in the period, taking its total estate to 972. It is working towards a target of 1,200 stores in the UK and Ireland.
Profits were also negatively affected by the Getting Personal online business, which saw a decline in sales.
In contrast, online sales on the core Card Factory website rose 56 per cent.
The group’s chief executive Karen Hubbard said the group delivered a robust performance for the year and margins would be improved through more efficient production techniques.
“We have further initiatives planned for the current year which will bring further production back to the UK, whilst also implementing additional plans that will allow an improved focus on customer service in store,” she said.
She reiterated that earnings in the current financial year are expected to be flat compared with 2018 due to continuing cost pressures.
Updating on current trading, she said: “Whilst the new financial year is just two months old, we are satisfied with the start we have made and are particularly pleased with record seasonal performances from Valentine’s Day and Mother’s Day.”
She said that initial trials with Aldi in the UK, in an Australian retailer, and with a franchise partner in Jersey show that the Card Factory brand is a footfall driver.
“We will pursue these types of opportunities to open new routes to market where we see attractive returns,” she added.
Zoe Mills, retail analyst at GlobalData, said: “Card Factory’s latest results have highlighted that even value and discount retailers are struggling to drive spend and footfall amid declining consumer confidence in the UK.
“Despite having such a large store estate – at a time when many retailers are reducing their number of physical locations – the greetings card specialist shows no signs of slowing its expansion strategy.”
Ms Mills said that despite a number of cost saving measures, such as in-house printing and supply chain optimisation, Card Factory’s operating profits have come under increasing pressure, falling 6 per cent to £70.8m.
“A poor festive period this financial year, compared to its usual tendency of performing better during seasonal events, will have had a negative impact on full year profitability,” she added.
“While store rollout out is a priority, the retailer must not lose focus on protecting margins and stimulating spend, especially since our consumer data shows that demand for greeting cards continues to drop year-on-year – with the throw-away nature of the product conflicting with consumers rising sustainability concerns and rising stamp prices dampening demand.”