Sales growth was boosted by the group's relentless shop opening programme but online sales were flat
Greetings cards sellers PLC () offered up a mixed bag in its third quarter trading update.
Year-on-year sales growth declined in the third quarter to 4.4%, bringing the growth rate for the nine months to the end of October down to 7.9%, but on the plus side the retailer said it had seen some improvement in sales of everyday ranges in stores since the start of October.
While the growth rate still looks impressive in the current tough retail environment, it looks less flattering when one factors in that the retail portfolio rose by 12 stores in the third quarter. Management declined to offer any metrics on like-for-like sales.
"The general retail environment has remained challenging with adverse footfall trends impacting customer traffic into our stores. We remain wary of the uncertain outlook for consumer confidence," said Karen Hubbard, Card factory's chief executive officer.
"We enter the important final quarter with an excellent Christmas offering, both in our card ranges and an expanded choice of seasonal gifts. Whilst it is always difficult to forecast short term footfall trends, we remain confident that the quality and value of our extensive range will continue to appeal to consumers," she added.
The shares rose 2.3% to 261.65p on the update, confounding the expectations of broker Liberum Capital Markets, which thought the statement would get a disappointing reception.
"There appears to have been no significant pick up in LFL store sales growth, with trading conditions and footfall remaining challenging during Q3. We need to see progression here to turn more positive," the broker said, as it reiterated its 'hold' recommendation.
"Online sales have also remained flat. On the positive, there has been some recent improvement in sales of everyday ranges and the store roll-out, the main driver of growth, is on track," it added.