Mothercare says it will meet current annual profit forecasts after trading improved in its home market and overseas in the fourth quarter.
Shares in Mothercare have dropped by close to 60% since the firm warned in January that its full-year profit would reach only half of what analysts had expected, prompting its chief executive Simon Calver to quit just weeks later. Although Mothercare did not specify the reasons for Calver’s departure, it has said that he will receive £250,000 in lieu of his six-month notice period.
The firm said sales at UK stores open over a year fell 0.3% in the 12 weeks to March 29th, an improvement on a 4% decline in its third quarter. Mothercare, which makes about 70% of its sales in Britain, has pushed to close under-performing British stores, revamp others and grow online to return the division to profit, but its efforts have struggled to make a difference in the face of competition from internet rivals and supermarkets. The firm said international sales in constant currency increased to 9.8% in the quarter, but were down 1.8% on a reported basis due to continued currency weakness.
The group, which named ex-Shop Direct boss Mark Newton-Jones as its interim chief executive last month, said it expected the UK environment to remain tough and the effects of currency devaluation overseas to persist into the new financial year.
According to Reuters data, analysts now expect Mothercare to post a pretax profit for the year to March 2014 of £8.3m, ahead of a restated £5.9m posted a year earlier. The firm, which has 1,441 stores worldwide, had aimed to make a profit on its loss-making British operations by 2015, but said in January that 2016 to 2017 was now more realistic.
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