Card Factory has posted a decline in half-year profits despite increased sales as the retailer unveils plans to roll out its Aldi supply partnership.

The greeting cards specialist posted a 7.9% decline in underlying pre-tax profit to £22m in the six months to July 31, as revenue rose 5.5% to £195.6m.

The retailer, which posted a 14.4% fall in pre-tax profit overall to £24.3m, registered a 1.5% uplift in like-for-like sales during the period, with like-for-like store sales up 1.2%.

Card Factory’s underlying EBITDA margin slipped to 14.7% in the six months compared with 16.1% the previous year, which the business attributed to increasing stock levels “for Brexit contingency planning, investment in new lines and the acceleration of seasonal buying”, as well as National Living Wage costs and card fees associated with debit and credit card payments.

The retailer said it expected its full-year adjusted underlying EBITDA to be in line with expectations.

The specialist retailer agreed to roll out its partnership to supply cards to Aldi across half the discounter’s store estate, comprising 440 stores, starting in November.

The move comes after a successful trial supplying cards to 130 of the grocer’s stores.

Card Factory has also kicked off a trial with Matalan to open concessions across 15 of its stores, and has also signed an exclusive partnership with Australian greeting cards retailer The Reject Shop to supply its 360-strong store estate with branded cards as of next year.

The specialist retailer opened 26 new stores in the period and is on track to open a total of 50 across the UK and ROI by year-end.

Chief executive Karen Hubbard said: “We have delivered a satisfactory sales performance in the first half of the year. A strong seasonal performance, which saw another year of record sales for both Valentine’s Day and Mother’s Day, was achieved against the backdrop of an increasingly challenging UK high street environment and consequent weaker footfall.

“The successful seasonal trading, combined with more sophisticated use of data and improvements to our customer experience, gives us confidence for the key Christmas trading period ahead.

“Although the current economic uncertainty continues to impact consumer confidence, we remain positive about the resilience of the card market, the strength of the Card Factory business model, and our growth opportunities for the business over the medium term.”