- Card Factory prints a threefold increase in digital sales during the Coronavirus lockdown.
- The retailer will resume operations at 10% of its nationwide stores from 15th June.
- The greeting card retailer furloughed 90% of its workforce at the start of May.
In a report on Tuesday, Card Factory (LON: CARD) revealed a threefold increase in its online sales during the Coronavirus lockdown. The company also highlighted that it will resume operations at 10% of its nationwide stores from 15th June. Card Factory, however, warned that social distancing measures are likely to continue weighing on its business in the upcoming weeks.
The company blamed the Coronavirus pandemic that has so far infected more than a quarter-million people in the United Kingdom and has caused over 39,000 deaths, for fuelling uncertainty in the market that makes it difficult to give meaningful full-year financial guidance for 2020.
Card Factory is currently about 75% down year to date in the stock market
Shares of the company were reported roughly 12% up on market open on Tuesday. The stock, however, lost its gain later in the day. At 39 pence per share, Card Factory is currently about 75% down year to date in the stock market. Learn more about stocks and the stock market.
The greeting card retailer remained dovish about its ability to make dividend payments for fiscal 2021. Card Factory said it will keep its focus on digital sales during the health crisis and will reveal broader plans for expansion in July.
The Wakefield-headquartered company currently has over 1,000 stores in the United Kingdom and Ireland combined. Social distancing, it added, will weigh on the efficiency with which it can handle transactions at a few of its stores. The company, however, expressed commitment to exploring ways to optimise transactions.
Card Factory receives financial support from the BoE’s COVID-19 aid scheme
Card Factory has already suspended its 2020 dividend. The retailer furloughed 90% of its workforce at the start of May as it received financial support from the BoE’s COVID-19 aid scheme. Card Factory is also in talks with its landlord to survive the novel financial challenges posed by the ongoing health crisis.
In terms of comparable sales, CardFactory.co.uk reported a massive 302% increase while a 68% growth in sales was seen in GettingPersonal.co.uk. According to Investec analysts:
“We expect the strategy to focus on new growth channels, such as wholesale, and optimising its portfolio. We believe Card Factory has sufficient capital to ride out a prolonged shutdown.”
Card Factory’s performance in the stock market was reported fairly upbeat in 2019 with an annual gain of more than 15%. At the time of writing, the greeting card retailer has a market cap of £131.33 million and a price to earnings ratio of 2.66.