Shares in Card Factory plunged more than 19 per cent this morning after the retailer warned that profits will be lower than expected following a challenging Christmas trading period.
The high street chain said full-year adjusted underlying earnings before interest, tax, depreciation and amortisation (Ebitda) will be in the range of £81m to £83m, reflecting “the softer than anticipated Christmas trading period”.
Read more: Worst year on record for retailers in 2019
Card Factory said that in 2021 Ebitda is likely to be impacted by between £5m to £10m due to “adverse external factors” including declining high street footfall, depressed sterling valuation and wage inflation.
In a trading update this morning the business said it had previously mitigated against market headwinds through offer improvements and business efficiencies.
However today Card Factory said the opportunity for further efficiencies “within the current business model” is finite.
Card Factory’s management is currently undertaking a “comprehensive review” of its business strategy, which could require further investment next year.
In the 11 months to 31 December, group revenue grew 3.6 per cent, while like-for-like sales dipped 0.6 per cent.
The card retailer’s online platform revenue growth slowed to 14.8 per cent from 59.1 per cent the previous year.
The company opened 47 new stores in the UK and Ireland during the period, and completed the roll out of its card range in 440 Aldi stores.