British retailer Card Factory has issued a profit warning, citing continued weak sales on the UK high street during the critical festive trading period. The announcement sent the company’s shares down nearly 27% to a three-year low.
The greeting cards and gifts retailer, which sells soft toys, Christmas decorations, and a range of seasonal cards, said persistent soft footfall and cautious consumer spending had hit UK store sales more than anticipated. “Those conditions have persisted as we moved into our most important trading period, leading to a UK store sales performance which is lower than our previous expectations,” the company said in a statement.
The warning comes amid a broader backdrop of economic uncertainty. Official figures released on the same day showed the UK economy unexpectedly contracted by 0.1% in the three months to October. Retailers were particularly affected, with consumer spending weaker than expected during the month, highlighting the challenging environment for high street businesses.
Card Factory now forecasts annual adjusted pretax profits of between £55 million and £60 million, representing a decline of 9% to 16.6% compared with last year. The retailer had previously expected earnings to grow by mid-to-high single digits. The revised guidance reflects the company’s struggles to attract shoppers in the current market, as rising prices and economic uncertainty continue to weigh on consumer confidence.
Investors reacted swiftly to the update, driving the company’s shares to a three-year low, a drop of almost 27%. Analysts said the profit warning underlines the difficulties facing traditional high street retailers as consumers increasingly shift to online shopping and remain cautious in their spending.
Card Factory’s performance highlights the pressure on UK retailers during the holiday season, a period that typically drives a substantial portion of annual profits. The company said it will continue to monitor trading conditions closely and adjust its strategy to respond to the evolving retail environment.
The retailer joins a growing list of UK high street businesses grappling with weaker-than-expected sales this year, illustrating the challenges posed by inflationary pressures and broader economic slowdown. While the company remains operationally sound, the profit warning underscores the fragility of consumer-focused businesses amid ongoing economic uncertainty.
