After a terrible 2018, one that saw the stock plunge nearly 41% in the space of a year, the retailer has found itself ranging between £1.75 and £2 in 2019, with brief forays either side of those levels. Card Factory PLC (LON:CARDC) now sits at a current trading price of £1.79 (Spreadex, 12/04/2019).
Investors were happy with January’s statement, despite the company itself labelling it ‘a robust Christmas trading period in a challenging consumer environment’. While year-to-date group revenue rose 3.4%, that was down on the 5.9% managed at the same point in 2018; worse was its like-for-like situation, with comparable sales actually falling 0.1% against the 3% increase posted the year previous.
And though it kept its full year underlying EBITDA expectations unchanged at £89 million to £91 million, its outlook for the upcoming financial year was troublesome. Expected ‘cost challenge’s, like the National Living Wage and electricity wholesale prices, will result in a £5 million to £6 million hit, while ‘the current consumer and macro-economic backdrop’ means Card Factory is anticipating ‘another difficult year’ in FY20.
If the firm is to avoid a drubbing on Tuesday, then it could really do with reaching the top end of those underlying EBITDA forecasts (at the £90 million mid-point it’d already be a 4.3% decline year-on-year). That, ideally alongside a slightly more positive phrasing for its FY20, something that admittedly might be hard to come by.
Card Factory PLC has a consensus rating of ‘Sell’ alongside an average target price of £1.60.
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