Card Factory slumps as it warns on profits, blames weather

(Sharecast News) - Shares in Card Factory tumbled on Thursday as the greeting cards retailer said it expects full-year underlying earnings to be down on the previous year on the back of uncertainty about Brexit and "extreme" weather conditions.In a trading update for the six months to the end of July, the group said it now expects full-year underlying earnings before interest, taxes, depreciation and amortisation of between £89m and £91m "dependent on the key fourth quarter trading period", down from last year's £94m.Total group sales in the first half were up 3.2%, slowing down from 6.1% growth in the same period a year ago, while like-for-like sales were 0.2% weaker versus a 3.1% increase, as it took a hit from the weak consumer environment and extreme weather conditions.Getting Personal, the company's online division, saw sales drop 8.5% in the first half compared to a 5% increase last year, due to increased competition and rising costs.During the half, the company opened 25 new UK stores, bringing the total estate in the UK to 940 stores. Card Factory said it was on track to deliver around 50 new UK stores in the current financial year. In addition, it opened one new store in the Republic of Ireland, meaning it now has a total of seven trial stores in the region.Chief executive officer Karen Hubbard said: "We continue to experience a weak consumer environment, made all the more challenging by the impact of this year's extreme weather conditions on high street footfall."The performance of our seasonal ranges has been strong, with our best ever Father's Day in terms of volume and value, although we recognise there has to be more focus on our Everyday ranges, which have lagged the seasonal performance."Our key Q4 trading period will of course be critical in determining the final result for the year, but we believe we are well positioned to deliver a good performance in our important Christmas trading season."Peel Hunt downgraded its stance on the stock to 'reduce' from 'hold' after the update. "There is no sign of the negative forecast momentum relenting, and we see little reason to hold the shares even if the special dividend is confirmed as set to be paid in H2," it said.At 0820 BST, the shares were down 7% to 196p.