Mothercare reports sales uplift

Babycare retailer Mothercare today unveiled a fresh rise in sales but warned margins will come under pressure from the falling value of sterling.

Like-for-like UK sales in the 11 weeks to March 28 rose 3.7%, the firm’s 15th consecutive quarter of growth, while international sales surged 40%.

Same-store UK sales for the full year rose 1.4% as the firm said it had also been boosted by its home shopping business, up 30.6% over the year.

Chief executive Ben Gordon described the fourth quarter result as another “strong performance”, helped by the popularity of Early Learning Centre ranges within 84 Mothercare stores. The company bought ELC in June 2007.

Mr Gordon said UK margins were in line with expectations for the year, but he warned of pressure going forward as a result of sterling’s weakness and the resulting impact on import costs.

He added: “We continue to manage the business tightly to mitigate the effect of currency movements.”

Matthew McEachran, a retail analyst at Singer Capital Markets, described the UK sales performance as “very creditable” and better than the small decline expected at the start of the quarter.

He said: “This uplift in trading performance has not been achieved as a result of increased promotional investment or at the expense of margins.”