Card Factory sees margin squeeze hit annual profit

Shares in Card Factory took a tumble yesterday after the group said profits will be weaker amid pressure on margins.

The discount greetings card chain warned that annual earnings would be in the range of £93 million to £95m, compared with last year’s haul of £98.5m, because of “continued margin pressure”.

It also told investors that it would be impacted by the weak pound and wage inflation, which will see it book an extra £7m to £8m in costs.

Chief executive Karen Hubbard said: “As we have reported previously, the group has faced significant cost pressures in the year; these, together with the further change in margin mix given the ongoing out-performance of lower-margin non-card categories, are reflected in our expected out-turn.”

She signalled that cost headwinds should ease, unless there is a “further dramatic shift in sterling”.

In the 11 months to 31 December, the firm opened 48 new UK stores, with that total expected to hit 50 by the year end.