SHARES in Mothercare plunged 30 per cent yesterday after the mother and baby products retailer issued a profits warning more than halfway into its turnaround plan.
Mothercare is the second listed-retailer to issue a Christmas profits warning after Debenhams’ shock announcement last week, also blaming higher levels of discounting activity on the high street as well as currency deflation overseas.
As a result Mothercare chief executive Simon Calver warned that full year profits “are likely to be below the current range of market expectations”.
Analysts had forecast a pre-tax profit of around £16m.
Sales at UK stores open more than a year fell four per cent in the 12 weeks to 4 January, compared with a 1.4 per cent decline in the first half. Total UK sales fell 9.9 per cent.
“In the UK, our stores suffered similar Christmas trading pressures to those reported elsewhere,” Calver said, adding that it had been forced to cut prices amid higher levels of high street discounting than the previous year, on both toys and clothing.
Calver said the continued to focus on its three-year turnaround plan launched in May 2012 to revive Mothercare’s struggling UK arm, including launching new ranges, and pricing its clothes more competitively.
Total group sales, including its overseas business which was hit by weaker currencies , were down 6.1 per cent.