Mothercare plc, the leading international mother and baby retailer, issues the trading update, which covers the 12 and 52 week periods to 29 March 2014.
Overview for Q4 - 12 weeks to 29 March 2014
-Worldwide network sales were down 2.5% with Group reported sales up 0.6%
-Mothercare plc now operates from 4.4 million sq.ft., up 5.8% year-on-year, and has 1,441 stores across 60 markets worldwide
-International has seen an improvement in constant currency sales to 9.8% but, as highlighted in January, the increasing level of currency devaluation has had an adverse impact on reported retail sales
-In the UK both like-for-like and Direct in Home sales have improved since Q3
-Full year FY2014 underlying profit is expected to be in line with current market forecasts
-In the UK, we expect the environment to remain competitive and promotional. In International, we expect the effects of currency devaluation to continue into the new financial year
-Mark Newton-Jones was appointed Interim Chief Executive during the quarter
Alan Parker, Chairman of Mothercare plc, said, "After a difficult Q3, it is encouraging to note that we have seen some improvement in trading for both International and the UK.
"International has continued to increase space and constant currency sales growth is stronger than the previous quarter, with positive like-for-likes. However the pace of currency devaluation, as highlighted in January, has increased with all four regions impacted. This adverse currency impact is expected to persist into next year. Nevertheless, our franchise partners continue to see opportunity and their business plans confirm double-digit space growth.
"In the UK we have continued to close loss-making stores and focus on a lean retail operation. We are increasingly moving to a multi-channel business with 29% of the sales mix, up from 25% in the previous year, attributable to our Direct business. UK like-for-like sales and margins are in line with expectations for the quarter, despite continued pricing-pressure in Home and Travel.
"We remain profitable at Group level and are focused on eliminating UK losses whilst also continuing to exploit our growth potential across our International markets."