Mothercare sticks to guidance despite falling UK sales
Mothercare sales plunged in the three months to mid-January, it told investors today, though the business remains on track to deliver on its full-year guidance.
Like-for-like UK sales dropped by 11.4 per cent over the parent and baby chain’s third quarter as it blamed “challenging trading conditions” as well as its programme of store closures.
Read more: Losses mount at Mothercare as revenues also fall
But the retailer fared even worse online, where sales fell by 16.3 per cent thanks to fewer digital visits and a dip in sales made via in-store iPads.
Overall UK sales dropped by 18.4 per cent as the company closes 36 stores by April.
International sales also declined by 3.2 per cent but Mothercare insisted it remains on track to deliver on its full-year guidance despite a fall in total sales of 18 per cent.
Today's trading update follows a £6.2m loss it revealed in November as revenue also declined.
Mothercare announced a rescue plan in May 2018 that outlined 60 store closures to meet a £19m savings target, as well as 200 job cuts in its head office.
“Whilst the UK continues to be challenging, in part as a result of our planned restructuring, we are still on course to deliver the necessary transformation,” said chief executive Mark Newton-Jones.
Read more: All the major high street retailers that closed shop in 2018
He pointed to Mothercare’s efforts to cut its net debt and to create a leaner organisation as evidence the business is on the right track.
“Looking ahead, our international business continues to show signs of recovery, although we expect market conditions in the UK to remain challenging with further disruption until April from our store closure programme,” Newton-Jones added.
Investors appear to have confidence in the strategy, with shares rising by three per cent in early morning trading.