Card Factory delivers solid sales growth, but shares pull back

LONDON (ShareCast) - Card Factory (LSE: CARD.L - news) said it continued to perform well as it neared the end of its financial year, though shares dropped sharply on Thursday as investors took profits following a steady rise in the stock since its flotation last May. Sales at the UK greeting cards and gifts retailer rose 8.1% year-on-year over the period from February to December 2014.

Like-for-like sales grew 1.8% and the group opened 51 new stores and saw further growth in the online business, Getting Personal.

Chief executive Richard Hayes said: "With only a few days of our financial year remaining, it is pleasing to report that the group continues to perform well, has had a solid Christmas trading period, and is on course to deliver sales growth at a similar level to the previous year." Annual growth in the first 11 months of the previous financial year was 8.9%.

Card Factory, which now has a total of 764 stores, will continue to achieve "further profitable growth", Hayes said.

Despite the confident outlook, the stock was down 4.5% at 263.3p by 11:12 on Thursday, following a near-25% jump since Card Factory's initial public offering in May 2014.

Broker Canaccord Genuity (Other OTC: CCORF - news) downgraded its rating on the shares from 'buy' to 'hold', saying that while the update was "solid" the stock recently surpassed its 270p target price.