Any optimism generated at the time of Card Factory’s (CARD) upbeat full-year results in April has been erased due to a troubling mix of low consumer confidence and declining like-for-like sales. And as rising costs and an aggressive expansion strategy come to a head, the security of the group's long-standing and much-prized special dividend now appears to be an issue. Despite weakness in the share price already this year, we believe halting special returns or curtailing store openings has the potential to destabilise the stock further.
IC TIP:
Sell
at
192p
Tip style
Sell
Risk rating
High
Timescale
Short Term
Bull points
New openings
Low rating
Bear points
Reduced special dividend
Like-for-like sales decline
Poor returns on new stores
Weak consumer environment