Mothercare has reported another heavy fall in sales and warned that market conditions in its domestic market and overseas remained challenging. However, it hailed significant strategic progress and stated that full-year profit would in line with market expectations.
The like-for-like sales decline in the UK eased to 8.8% over its fourth quarter to 30 March, compared to a 11.4% slump the previous period. The group stated that the slightly improved performance had been driven by clearance stock volumes during shop closures. However, this clearance activity impacted online full price sales as volumes switched to stores that were being closed.
Total UK sales plunged 14.5% in the quarter after Mothercare completed its store closure programme ahead of schedule, shutting down 40 stores over the last three months. Its UK estate now comprises of 80 stores, down from 137 at the same time last year.
Excluding the impact of currency fluctuations, sales in the group’s international unit were down 4.9%, compared to a 1.1% fall in the previous quarter. The group blamed “economic and trading challenges in the Middle East”.
Last month, Mothercare sold its Early Learning Centre business to The Entertainer for £13.5m as part of moves to cut its debt levels and focus on its core business.
The group stated today that it was on track to deliver at least £19m of annualised cost savings, with its full-year performance in line with previous guidance.
“We have continued to make significant progress in our final quarter as we continue our strategic transformation to deliver a sustainable and profitable future for Mothercare,” said Chief Executive Mark Newton-Jones.
“The disruption we have seen from both the organisational changes and the UK store closures is now largely behind us. We expect a continued impact on our business given the volume of clearance stock we have sold in recent months. Against this background, we remain on track to deliver on our full-year expectations.”
“Looking ahead, we expect market conditions in the UK and in some international markets to remain challenging.”
