Updated: 09/01/18 : 06:22:35
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Mothercare shares slump after poor sales in Q4 (2017)

Shares in Mothercare fell by more than a quarter on the London Stock Exchange yesterday, after the company announced a slump in sales in the 12 weeks to December 30.

At the time of writing, stocks in the global retailer for parents and young children were trading at 45.26, a considerable decrease on the highs of 132.00 reached in May 2017.

In the UK, like-for-like sales declined by 7.2pc in the 12-week period, while online sales there, which represent approximately 42pc of its total UK sales, declined by 6.9pc.

In a trading update yesterday, Mothercare said that the fall in sales reflected its ongoing store closure programme.

In addition, the company had signalled in November that there had been a softening in the UK market, with lower footfall and website traffic resulting in lower spend.

CEO Mark Newton-Jones said this trend had continued, "resulting in our UK like-for-like [decline] of 7.2pc in the 12 weeks".

The company now expects its adjusted group profit for the year to be in the range of 1m and 5m (1.13m-5.65m). Last year the company recorded an underlying profit of 19.7m.


Mothercare also experienced a decline in sales in its international markets, where it described trade as "challenging in the quarter overall".

On a constant currency basis, international sales fell by 3pc, while sales were down almost 7pc in actual currency.

However the retailer said it had seen a return to moderate growth in the Middle East, where the company has over 350 stores, during the last seven weeks.

"Whilst this [return to growth in the Middle East] is positive news, it is too early to say whether or not this is the beginning of a more sustained upturn in sales across the region," Mr Newton-Jones said.

In Russia, Mothercare's largest international country by turnover, the company also saw a return to growth, as the weather became colder, leading to improved trading conditions. The company expects its net debt at year-end to be approximately 50m.

Mr Newton-Jones said that while the performance of the business has been challenging in the last few months, "the company remained singularly focused on transforming Mothercare to be the leading global retailer for parents and young children".

Mothercare has stores in a number of locations in Ireland, including Dublin, Kerry, Laois, Limerick, Waterford and Sligo.

The news follows the results of department store operator Debenhams, which last week saw its shares fall by as much as 20pc after a lacklustre performance, saw it issue a profit warning.

Investors last week punished Debenhams after it said that like-for-like sales in its last quarter fell 1.3pc on a group basis, and that its post-Christmas sales performance was "below expectations", despite price markdowns.

Irish Independent