(Reuters) -British greeting card retailer Moonpig on Thursday said annual revenue would lag market expectations as consumers rethink their gifting choices in a tough economic environment.
In the UK, which accounts for more than 80% of Moonpig’s revenue, consumers have been cutting back on discretionary spending including holiday gifting amid rising living costs and an uncertain economic environment.
The company now expects revenue for the 2025 financial year to be between 350 million pounds and 353 million pounds, compared to analysts’ consensus of 355.9 million pounds, according to a company-compiled poll.
Moonpig, which has expanded into newer markets like the U.S. and Australia, said it expects to start a 60 million pound ($78.7 million) share buyback in its financial year 2026.
In December, the company cautioned that its Experiences segment, which focuses on short stays and dining out, will take longer than anticipated to realize its revenue generation potential due to tough trading conditions.
The greeting card and gift retail market generally sees growth in the latter half of the fiscal year, spurred by occasions like Christmas, Valentine’s Day, and Mother’s Day.
Moonpig’s Greetz brand – its greeting cards and gifting brand in the Netherlands – had a softer start to the second half of the year, it said.
Although the company has been increasing investments in technology, including the use of AI to enhance its online search functionalities and retain customers, challenging conditions have led to slower growth in the card retailer’s consumer base.
Moonpig shares fell more than 2% following the release but later recovered losses to trade little changed in early Thursday trade. As of Wednesday’s close they were up 4% from the start of the year.
“Results today are in line with our views, where we believe consensus estimates for sales growth in the next two years are overoptimistic,” analysts at Panmure Liberum said in a note.
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(Reporting by Raechel Thankam Job; Editing by Mrigank Dhaniwala, Sonia Cheema and Jan Harvey)
