Mothercare profit warning sees shares dive

Mother and baby products retailer Mothercare has warned that "difficult trading" conditions could push its annual profits well below current market expectations.

Shares are down over 27 per cent, at 305p, on the news.

The company has been particularly squeezed by competitive discounting over the Christmas season. Like-for-like sales at Mothercare stores fell by four per cent over the last 12 weeks.

Chief executive Simon Calver said:

In the UK, our stores suffered similar Christmas trading pressures to those reported elsewhere. Customer service scores continue to improve year on year but weaker footfall and higher promotional activity led to lower sales and margins.

The group announced on Wednesday that sales fell 6.1 per cent in the 12 week period to 4 January compared to the same period the previous year. Total UK sales have suffered an even more dramatic decline of 10 per cent.