Card Factory revenue rises on Funky Pigeon boost

Card Factory reported that its revenue increased by 5.3% to £260.8 million for the six months ending July 31, 2026. The rise was primarily driven by the acquisition of Funky Pigeon, which helped balance a drop in physical store sales. Without this acquisition, the company’s overall sales would have remained unchanged, according to a retail analyst. The purchase boosted online revenue to 6.1% of total sales, up from 1.3%, reducing dependence on in-store traffic. Adjusted EBITDA grew by 2.0% to £45.1 million, though profitability continues to face challenges due to the costs associated with Funky Pigeon.

In-store performance declined in the first half, with total sales falling by 0.7% to £226 million despite opening nine new locations. The new stores failed to compensate for declines in existing ones, and sales have increasingly shifted away from greeting cards. Party, gift, and celebration items now represent 55.4% of revenue, up by 2.0 percentage points, while celebration essentials grew by 7.6% year-over-year. Stores that have been refitted to focus on party and gifting have shown better performance, indicating that the strategic shift is effective. However, the company must expand this approach and introduce a loyalty program by the end of the fiscal year to increase customer visits and average spending.

Digital sales reached £16 million, up from £3.2 million, but this growth was entirely due to Funky Pigeon. Meanwhile, cardfactory.co.uk experienced a 15.5% decline in like-for-like sales, a sharper drop than the 11.3% decline recorded a year earlier. Funky Pigeon’s renewed marketing efforts attracted 11% more new customers, though the digital segment’s adjusted EBITDA loss increased to £3.5 million from £1.6 million. The long-term viability of the acquisition depends on whether these new customers continue purchasing during seasonal periods. To remain competitive with online-focused rivals like Moonpig, Card Factory should highlight its click-and-collect service, especially for party and celebration items, where physical stores maintain an edge.

The company has reaffirmed its full-year profit guidance of £56.7 million in adjusted profit before tax. Meeting this target will require stronger performance in the second half compared to last year. Early results from the new party-focused product lines and store renovations are encouraging, but the company must accelerate its omnichannel strategy. With UK store like-for-like sales expected to rebound in the second half, the holiday season will be decisive in determining whether the transition to digital and celebration-driven sales can maintain profitability.