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Mothercare trading improves in Q4, online returns to growth
A fourth quarter update from mother and baby retailer Mothercare on Thursday showed a slowdown in the company's declining sales, while the online segment returned to growth against a still-challenging backdrop.
In the 12 weeks to 24 March 2018, UK like-for-like sales were down 2.8%, which was huge improvement on the 7.2% drop seen in the third quarter. Meanwhile, online sales were up 2.1%, also massively improved compared to 6.9% a decline in the previous quarter.
International sales fell 3.7% compared to a 3% drop the previous quarter, hit by lower market footfall and the timing of promotional activity in Russia.
Chief executive officer David Wood said: "Our overall group performance for FY18 was in line with previous guidance for both adjusted group profit and net debt. "The UK retail trading environment remained relatively muted in the quarter, with a continuing trend of lower footfall in stores, though there was an encouraging return to growth online, with website sales in particular growing at 7.2%. In this competitive climate, promotional activity has been necessary to stimulate customer demand.
"My immediate priority is to ensure Mothercare is put back on a sound financial footing and to improve its financial performance. We continue to make good progress in reducing the size of our UK store estate in response to changing consumer preferences and in reducing our central cost base, but our central focus must be customers and their experience, securing Mothercare's reputation as the number one specialist for parents."
Mothercare said it remains in constructive dialogue with its financing partners with respect to its needs for FY19 and beyond, and continues to explore additional sources of financing to support and maintain the momentum of its transformation programme.
The retailer, which announced earlier this year that it was planning to cut its stores from 140 to 80, said it continues to make good progress in reducing the size of its UK store estate in response to changing consumer preferences.
At 0950 BST, the shares were up 0.5% to 17.08p.