April 16, 2019 / 7:16 AM / 3 months ago

UPDATE 1-Card Factory full-year core earnings drop as costs rise

(Adds details on earnings, background)

April 16 (Reuters) - Card Factory Plc reported lower full-year core earnings on Tuesday as the greetings card retailer was hurt by higher costs, lower traffic and weak demand for its online personalised gifting service.

Lower footfall in Britain’s high-street stores has hurt many retailers, including Card Factory, as Britons cut back on spending due to Brexit related uncertainty.

The glum has also been compounded by extreme weather in the UK and stiff competition from online players.

Wakefield-based Card Factory said underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) fell nearly 5 percent to 89.4 million pounds ($117.09 million) for the 12 months ended Jan. 31.

Card Factory said like-for-like sales at its online Getting Personal service, which lets customers get made-to-order gifts, fell 8.4 percent, bitten by heavy discounting and spending on promotions.

The company said total underlying cost of sales was 312.5 million pounds compared with 297 million pounds a year earlier.

Revenue rose 3.3 percent to 436 million pounds in fiscal 2019, while total like-for-like sales fell 0.1 percent.

Card Factory expects the hit to core earnings to continue in the coming year, despite a positive start led by special occasions which boosted demand.

“We are satisfied with the start we have made and are particularly pleased with record seasonal performances from Valentine’s Day and Mother’s Day,” Chief Executive Officer Karen Hubbard said in a statement. ($1 = 0.7635 pounds) (Reporting by Tanishaa Nadkar and Pushkala Aripaka in Bengaluru; Editing by Shounak Dasgupta and Gopakumar Warrier)

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