July 28, 2020 / 8:29 AM / 13 days ago

Card Factory sets 2025 targets, sales fall less than expected as lockdowns ease

FILE PHOTO: A woman wearing a face mask looks at a smartphone as she walks past a shuttered branch of Card Factory in Hackney, following the outbreak of the coronavirus disease (COVID-19), London, Britain, June 2, 2020. REUTERS/Simon Newman

(Reuters) - UK’s Card Factory (CARDC.L) on Tuesday laid out targets for financial year 2025 and said sales at its stores dropped less than expected since reopening due to easing lockdown restrictions and higher average spend, sending its shares up as much as 12%.

The strategy update from the card retailer, which comes soon after top boss Karen Hubbard stepped down after being at the helm for four years, includes a revenue target of around 635 million pounds for 2025 and an underlying pretax profit of about 105 million pounds.

“Ambitious targets and we are excited to hear more about the capital light model the group is targeting with c.5,600 distribution points (UK and International), of which c.1,100 will be group operated stores,” Liberum analysts said.

The Wakefield-based firm, which has been grappling with online competition and higher costs of maintaining brick-and-mortar stores, expects first-half revenue for financial year 2021 to be about 100 million pounds, ahead of Liberum’s estimates.

The company said like-for-like in-store sales since reopening were down 21.6%, compared to an expected 50% reduction in the first month of reopening.

Like-for-like online sales at both cardfactory.co.uk and gettingpersonal.co.uk were up 68.9% for the current financial year to July 19 compared with a year earlier, the company said.

It was too soon to determine whether initial performance reflects the release of pent-up demand following the lockdown or the point at which consumer footfall and sales will settle to a sustainable level, the company added.

Shares in Card Factory were up 7.7% at 44.5 pence by 0843 GMT.

Reporting by Tanishaa Nadkar in Bengaluru; Editing by Vinay Dwivedi

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