Mothercare issues full-year profit warning

8th Jan 2014 07:46

- Issues full-year profit warning- Difficult UK trading conditions, volatility in International markets- Cautious outlook for consumer spendingBaby products retailer Mothercare said it expects full-year profit to come in below the current range of market forecasts as it battled against Christmas price discounting and weak trading conditions.UK total UK sales fell 9.9% in the 12 weeks to January 4th while UK like-for-like sales (LFL) fell 4.0% during the period following difficult trading conditions. Total group sales fell 6.1% while International retail sales inched up 0.4%. "International has been negatively impacted by currency deflation and weaker than expected economic conditions in some of our key markets, resulting in lower royalty revenues," the group explained in a company update.Mothercare said it remains cautious about the outlook for consumer expenditure and currency deflation for the rest of the year and as a result, expects full year profit to miss the current range of market forecasts.Chief Executive Simon Calver said: "Difficult UK retail trading conditions and volatility in some of our International markets resulted in weaker than expected worldwide network sales this quarter. "In the UK, our stores suffered similar Christmas trading pressures to those reported elsewhere. International was impacted by currency deflation reducing the reported rate of growth and by heightened economic volatility. In some of our larger markets such as Russia and the Middle East we have also experienced some unseasonal weather, which impacted sales. Trading has been improving more recently."Mothercare added that it continues to put focus on delivering a turnaround in the UK and seeking global growth opportunities.CJ