Mothercare on track after UK improvement in fourth quarterThursday 10 April 2014 08.23
British baby products retailer Mothercare said it would meet current annual profit forecasts after trading improved in its troublesome home market and overseas in its fourth quarter.
Shares in Mothercare have sank about 60% since the firm warned in January that its full-year profit would reach only half of what analysts had expected.
This prompted its chief executive SimonCalver to quit just weeks later.
The firm said today that sales at UK stores open over a year fell 0.3% in the 12 weeks to March 29, an improvement on a 4% decline in its third quarter.
Mothercare, which makes about 70% of its sales in Britain, has pushed to close underperforming UK stores, revamp others and grow online to return the division to profit.
But its efforts have struggled to make a difference in the face of fierce competition from internet rivals and supermarkets.
The firm said international sales on a constant currency basis increased to 9.8% in the quarter, but were down 1.8% on a reported basis due to continued currency weakness.
The group, which named ex-Shop Direct boss Mark Newton-Jones as its interim chief executive last month, said it expected the UK environment to remain tough and the effects of currency devaluation overseas to persist into the new financial year.
According to Reuters data, analysts now expect Mothercare to post a pretax profit for the year to March 2014 of £8.3m, ahead of a restated £5.9m a year earlier.
The firm, which has 1,441 stores worldwide, had aimed to make a profit on its loss-making British operations by 2015, but said in January that 2016 to 2017 was now more realistic.