Nursery Today magazine

Tangible results for Mothercare

Announcement of Q4 trading update

Mothercare plc, the leading global retailer for parents and young children,  issues the following trading update, which covers the 11 week period to 26 March 2016.

UK
UK like-for-like sales were up 2.1% during Q4 with support from online sales which were up 5.6%. Online sales now account for c35% (LY: c30%) of total UK sales
Continued focus on full price sales led to another quarter of stronger gross margins
They ended the quarter with 170 stores (162 Mothercare and eight ELC), of which 56 stores (almost 40% of space) were trading in the new modern refitted format
Total UK sales were up 0.8% as both online and store sales benefitted from the ongoing strategy, despite the planned (6.4%) year-on-year reduction in space 

International
International continues to be affected by ongoing economic and currency headwinds. Retail sales in constant currency were down (9.7%) with currency further impacting retail sales in actual currency which were down (10.8%)
All four regions saw a reduction in both constant and actual currency sales. In the Middle East consumer sentiment was impacted by the sustained lower oil price, resulting in a significant decline in constant currency sales. In Asia, China in particular, was affected by weakening consumer confidence. Europe and Latin America were impacted by adverse currency moves
Space was up 4.6% year-on-year. Latin America saw an increase in store numbers, but a small reduction in space. Europe saw a similar reduction as we rationalised unprofitable space. They continue to see opportunities in Asia and the Middle East and grew space despite current economic conditions
Mothercare ended the quarter with 1,310 stores (947 Mothercare and 363 ELC) and 3.0m sq.ft. of retail space

Mark Newton-Jones, Chief Executive Officer of Mothercare plc, said:  "Overall Group underlying profit for FY2016 is within the range of current market expectations. The UK is responding well to our strategy with continued sales growth and improved margins. International continues to be impacted by adverse currency and weakening consumer confidence in some key markets as economic headwinds persist.
"In the UK we have delivered our eighth consecutive quarter of positive like-for-like sales growth with a full year of improved margins. Almost 40% of space is now in the new and much improved format, which along with a revamped online offer, improved product and service are being well received by our customers."
"International continues to be adversely affected by the sustained economic and currency headwinds. Whilst all four regions are softer, the Middle East and China in particular have been impacted by weaker consumer confidence. Along with our partners, we continue to see opportunity to grow space and are now translating key learnings from modernising the UK into our international markets.
"In the year ahead, we expect to make further progress in the UK. However, our international markets are likely to remain challenging with the current trends in space, sales and currency continuing into the new financial year. Nevertheless we remain firmly focussed on our strategy to build our business both in the UK and internationally and our vision remains clear - to be the leading global retailer for parents and young children."

 


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