Card Factory has warned that continued headwinds and margin pressures will impact its full-year profits.
Card Factory said its performance over Christmas was “solid” with year-to-date sales up 5.9%.
Like-for-likes are up 2.7% across the 11 months to December 31.
However, the card specialist pointed out that “continued margin pressure” will lead to full-year underlying EBITDA coming in between £93m and £95m.
In its previous full year, Card Factory generated underlying EBITDA of £98.5m.
Chief executive Karen Hubbard said: “The group has faced significant cost pressures in the year; these, together with the further change in margin mix given the ongoing out-performance of lower-margin non-card categories, are reflected in our expected outturn.
“We anticipate that the combined impact of foreign exchange and wage inflation in FY19 will result in £7-8m of additional costs; whilst we have plans to mitigate this impact as far as possible, we recognise that against this backdrop, any EBITDA growth for the year is likely to be limited.
“Looking further ahead, cost headwinds should ease unless there is a further dramatic shift in sterling.”
The retailer said its sales performance over the Christmas period at its online personalised gifting business – gettingpersonal.co.uk – was “disappointing”, resulting in broadly flat sales in the year to date.
Card Factory opened 48 new stores in the period, bringing the total UK estate to 913 stores.
It also opened six new trial stores in the Republic of Ireland.