Card Factory - Online sales increasing

Thursday, 15th November 2018 09:28 - by Rajan Dhall

This morning Card Factory sent out their latest trading update and the high st. the retailer is looking solid after a push to open new stores and increasing their online presence. The report shows an increase in debt but the company say this is due to the increase in stock before the busy Christmas period. 

·      Year-to-date ("YTD") group revenue growth of +3.4% (2018: +6.7%)

·      YTD Card Factory like-for-like ("LFL") sales of 0.0% (2018: +3.5%)

·      Continued store roll out with 41 net new UK stores opened YTD and on track to deliver approximately 50 net new UK openings in the full year

·      Card Factory website delivered YTD revenue growth of +70.9% (2018: +44.6%)

·      Getting Personal YTD revenue reduction of 8.9% (2018: +3.8%)    

·      Board's underlying EBITDA expectations for the full financial year remain unchanged at £89m - £91m

Although the companies CEO remains upbeat he also stated that "The business faces reduced, but ongoing, external cost pressures such as national living wage and foreign exchange-related input cost increases; the latter is expected to ease in FY20. We remain focused on mitigating these headwinds with our ongoing programme of business efficiencies.''

Looking at the chart now, it's clear we broke the trendline to the upside yesterday but this comes after months of downward pressure. Only since Septemeber have prices started to consolidate and stabilise and recently the market has struggled to push the price through 200p. Volume has only just started to tick higher on the buy side but the report looks slightly neutral and it might not be enough to send the stock soaring. Nevertheless, at least the bad news is limited and it seems that there is every chance we could test the 200p resistance level once more. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.