Card Factory Share News (CARD)

(Sharecast News) - Greeting card retailer Card Factory tumbled on Thursday after it warned over the impact of "significant" inflationary headwinds on EBITDA margins and said 2023 profit would come in lower than previously expected.
The company said trading in the 11 months to the end of December 2021 had been ahead of the board's expectations, driven by a good recovery through the easing of Covid restrictions and strong trading in December, with like-for-like sales returning close to December 2019 levels.

Total sales for the period came in at £337.3m, ahead of the board's expectations but below the £424.5m for the pre-Covid 11 months to 31 December 2019.

However, the devil was in the detail and the shares slid as the retailer said that while all actions have and will be taken to mitigate inflationary headwinds - including prices increases - pressure will not be fully offset and FY23 profits will take a hit.

At 0930 GMT, the stock was down 13.4% at 55p.

Halfords said it was still confident of delivering year-on-year revenue growth towards the level delivered in FY20.

Chief executive officer Darcy Willson-Rymer said: "We continue to see improved trading performance across all channels, with transaction volumes in our stores outperforming high street footfall recovery, demonstrating the loyalty of our customers and strength of the brand. The customer response to our Christmas ranges was particularly strong, across both card and complementary product ranges.

"Our vertically integrated model has put the Group in a strong position to partially mitigate the supply chain challenges and inflationary pressures that have been seen across the wider market to date. Whilst we expect to be able to offset inflationary pressures to an extent through price increases across our ranges, we do anticipate some margin pressure during the next financial year, as the forecasted inflationary headwinds continue."