Card Factory has issued a shock profit warning during its peak Christmas trading period, sending shares down by more than a fifth. The retailer, which also owns Funky Pigeon, cited economic pressures on shoppers that have hit consumer confidence and high street footfall.
The company now expects annual adjusted pre-tax profits of between £55m and £60m, down from previous forecasts of mid to high single-digit percentage growth on last year's £66m. It attributed the shortfall to persistent weak trading conditions, which it said are unlikely to be recovered in the remaining weeks of its financial year.
Card Factory also announced plans to cut 76 jobs as part of a productivity and efficiency programme to mitigate ongoing high inflation. The company said its long-term strategy remains on track, with its international operations in North America and the Republic of Ireland performing in line with expectations.
The profit warning comes amid broader challenges for the greetings card industry, including a long-term decline in physical mail volumes and rising stamp costs. Royal Mail now delivers about 6.6bn letters annually, down from 20bn two decades ago, while first-class stamp prices have risen to £1.70.
Analysts noted that the pre-budget impact on consumer spending has hit store footfall and sales, with the trend continuing into December. Card Factory said it does not believe it can make up for lost sales in the remainder of the year.
