Shares in Clinton Cards plummeted yesterday after Britain's largest card-shop chain moved to slash market profits forecasts by two-thirds.
The stock suffered its biggest one-day decline in six years, and closed down 14 per cent at 64.5p. The company spooked the market with its warning that full-year operating profits, excluding exceptionals, would be between £6m and £8m. That compares with previous analysts' forecasts of £18.1m for the year to 29 January. Like-for-like sales in the group's Clinton brand fell 2.4 per cent in the five weeks to Christmas Eve. While the Birthdays brand, acquired in December 2004 from Sir Tom Hunter, achieved sales growth of 4.5 per cent over that period, it fell short of expectations and the company warned that losses in Birthdays would be higher-than-anticipated as a result.
A spokesman for the 1,218-strong chain said: "Trading up to Christmas continued to be the most challenging for years. Although volumes of Christmas cards and gifts within the Clinton brand were higher, customers purchased at lower price points than last year." Seymour Pierce downgraded Clinton to "sell" after the news, and analysts at Investec warned the dividend could be cut, slashing their pre-tax profits forecast by two-thirds to £3.5m after Clinton's poor Christmas.
Mark Charnock, at Investec, said: "Confidence in making profits from Birthdays next year has been severely dented, and questions arise as to whether management will ever be able to generate the profits from Birthdays that was hoped for."
Like-for-like sales in the Clinton brand fell 2.1 per cent in the 47 weeks to 24 December, while Birthdays sales rose 1.9 per cent.Reuse content