RE: DISAPPOINTING ONLINE SALES4 Jun 2020 16:21
Most companies have found SP tank in the past 5 months.
Look at British Airways (IAG): it was £6.50 in January 2020, fell to £1.65 in May 2020, and now is rising back to £2.80.
In comparison, Card Factory was £1.40 in January 2020, it dropped to 30p in May 2020, and now it is rising back to 50p.
This is why they are called 'recovery stock'. No doubt there is a risk, but there is also potentially significant upside here.
In my opinion, the biggest upside to Card Factory is the how they have managed to build a solid online business during Covid.
Since lockdown: cardfactory.co.uk sales up 302%. gettingpersonal.co.uk sales up 68%. That is why they have opened a second warehouse in Wakefield because online demand has surged.
Sales on gettingpersonal.co.uk were disappointing before Covid (that is what the RNS states). But have now surged 68% during lockdown. The key to success will be keeping the momentum.
There are some companies like Boohoo, Asos, AO.com etc who are online only and their SP have sky rocketed. There are others who are high street mainly, and they are recovering slowly. But Card Factory is best of both - online booming, and 1,000 stores gradually re-opening too. The combination of the two should provide for some solid performance over the coming months.
Finally, during recession budget shops tend to do better. Pound stores, B & M, Aldi etc thrive. Card Factory are considered a budget shop, and if finances are tough more people are likely to shop there. Just search "Card Factory" on twitter - you will see people moaning that they are having to pay £4 for a card, and saying can't wait for Card Factory to re-open.
All my opinion. Do your own research and read RNS carefully.