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Card Factory first-half core profit drops on lower customer traffic

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(Reuters) – Card Factory <CARDC.L> on Tuesday said core earnings in the first half of the year fell due to weak consumer confidence, which kept shoppers away from its stores, sending its shares down 7 percent in early trading. The greeting cards retailer said its underlying earnings before interest, taxation, depreciation and amortisation fell 8.9 percent in the six months ended July 31, to 29.9 million pounds.

Last month, Card Factory flagged a decline in first-half same-store sales and warned of a core earnings decline for the year, blaming unusual weather and challenging customer traffic.

The decline in same-store sales is another example of tough times for British high street retailers, which have also been hit by online competition.

The company also said the trading performance at its Getting Personal segment remained “challenging” under increased price competition.

“Our like-for-like performance has impacted profitability, as have the ongoing cost headwinds of foreign exchange and national living wage,” said Chief Executive Officer Karen Hubbard.

The company reaffirmed its forecast for underlying profit for the year in the range of 89 to 91 million pounds, having lowered it in August. It also remains on track for 50 store openings by year end.

Revenue rose 3.2 percent to 185.3 million pounds, but like-for-like sales fell marginally.

The company also declared a special dividend of 5 pence, which is at the bottom end of its previous guidance.

(Reporting by Shariq Khan and Justin George Varghese in Bengaluru; Editing by Alison Williams, Bernard Orr)

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