REG-Mothercare Plc : Trading Statement <Origin Href="QuoteRef">MTC.L</Origin>

MothercareAnnouncement

14/04/2016 07:05

MOTHERCARE PLC 
 
 Q4 trading update 
 
 FURTHER IMPROVEMENT IN UK - TANGIBLE RESULTS FROM NEW STRATEGY 
 
 INTERNATIONAL MARKETS HOWEVER STILL CHALLENGING 
 
 FY2016 GROUP UNDERLYING PROFIT WITHIN RANGE OF EXPECTATIONS 
 
   
 
 Mothercare plc, the leading global retailer for parents and young children,
today issues the following trading update, which covers the 11 week period to
26 March 2016. 
 


 
 UK 
 
 * UK like-for-like sales were up 2.1% during Q4 with support from online
sales which were up 5.6%. Online sales now account for c35% (LY: c30%) of
total UK sales 
 * Continued focus on full price sales led to another quarter of stronger
gross margins 
 * We ended the quarter with 170 stores (162 Mothercare and eight ELC), of
which 56 stores (almost 40% of space) were trading in the new modern refitted
format 
 * Total UK sales were up 0.8% as both online and store sales benefitted from
the ongoing strategy, despite the planned (6.4%) year-on-year reduction in
space 
 
 
   
 
 International 
 
 * International continues to be affected by ongoing economic and currency
headwinds. Retail sales in constant currency were down (9.7%) with currency
further impacting retail sales in actual currency which were down (10.8%) 
 * All four regions saw a reduction in both constant and actual currency
sales. In the Middle East consumer sentiment was impacted by the sustained
lower oil price, resulting in a significant decline in constant currency
sales. In Asia, China in particular, was affected by weakening consumer
confidence. Europe and Latin America were impacted by adverse currency moves 
 * Space was up 4.6% year-on-year. Latin America saw an increase in store
numbers, but a small reduction in space. Europe saw a similar reduction as we
rationalised unprofitable space. We continue to see opportunities in Asia and
the Middle East and grew space despite current economic conditions 
 * We ended the quarter with 1,310 stores (947 Mothercare and 363 ELC) and
3.0m sq.ft. of retail space 
 
 
   
 
 Group performance for 11 weeks to 26 March 2016 
 
                                                                                           11 weeks:     52 weeks:    
                                                          FY2015    FY2016                     26 March 2016              
                                                          Q4        Q1       Q2       Q3       % change year-on-year      
  UK                                                                                        Q4            Q4 YTD       
  Total UK sales                                           1.5       (0.9)    1.8      (0.1)    0.8           0.3          
  Online sales                                             31.8      23.9     20.4     11.8     5.6           15.2         
  UK like-for-like sales (1)                               5.1       1.3      6.5      4.2      2.1           3.6          
  UK space (change in sq.ft.)                              (4.5)     (5.3)    (7.4)    (6.1)    (6.4)         (6.4)        
  International                                                                                                      
  International retail sales in constant currencies (1)    11.4      (1.3)    5.6      (1.3)    (9.7)         (1.4)        
  International retail sales in actual currencies (1)      5.5       (4.8)    (5.3)    (9.5)    (10.8)        (7.4)        
  International space (change in sq.ft.)                   9.0       7.9      6.6      5.8      4.6           4.6          
  Group                                                                                                              
  Worldwide sales (2)                                      4.1       (3.5)    (2.8)    (5.5)    (6.7)         (4.5)        
  Total group sales (3)                                    (1.0)     (5.2)    (7.1)    (5.4)    1.4           (4.4)        
   
 
 Mark Newton-Jones, Chief Executive Officer of Mothercare plc, said: 
 
 "Overall Group underlying profit for FY2016 is within the range of current
market expectations. The UK is responding well to our strategy with continued
sales growth and improved margins. International continues to be impacted by
adverse currency and weakening consumer confidence in some key markets as
economic headwinds persist." 
 
 "In the UK we have delivered our eighth consecutive quarter of positive
like-for-like sales growth with a full year of improved margins. Almost 40% of
space is now in the new and much improved format, which along with a revamped
online offer, improved product and service are being well received by our
customers." 
 
 "International continues to be adversely affected by the sustained economic
and currency headwinds. Whilst all four regions are softer, the Middle East
and China in particular have been impacted by weaker consumer confidence.
Along with our partners, we continue to see opportunity to grow space and are
now translating key learnings from modernising the UK into our international
markets." 
 
 "In the year ahead, we expect to make further progress in the UK. However,
our international markets are likely to remain challenging with the current
trends in space, sales and currency continuing into the new financial year.
Nevertheless we remain firmly focussed on our strategy to build our business
both in the UK and internationally and our vision remains clear - to be the
leading global retailer for parents and young children." 
 
   
 
 Investor and Analyst enquiries to: 
 
 Mothercare plc 
 
 Mark Newton-Jones, Chief Executive Officer 
 
 Richard Smothers, Chief Financial Officer 
 
 Ramona Tipnis, Director of Investor
Relations                                   
01923 206455 
 
   
 
 Media enquiries to: 
 
 Helen Gunter, Director of Communications, Mothercare 
 
 John Olsen/Simon Hockridge, MHP Communications        
                   020 3128 8100 
 
   
 
 Notes: 
 
 1 - UK like-for-like sales are defined as sales from stores that have been
trading continuously from the same selling space for at least a year and
include online sales. International retail sales are the estimated retail
sales of overseas franchisees and joint ventures and associates to their
customers. International like-for-like sales are the estimated franchisee
retail sales from stores that have been trading continuously from the same
selling space for at least a year. 
 
 2 - Worldwide sales are total International sales plus total UK sales. Total
International sales are International retail sales plus International
Wholesale sales. 
 
 3 - Total group sales is a statutory number and is made up of total UK sales
and receipts from our International partners, which includes royalty payments
and the cost of goods dispatched to our franchise partners. 
 
 4 - This announcement contains certain forward-looking statements concerning
the company. Although the Board believes its expectations are based on
reasonable assumptions, the matters to which such statements refer may be
influenced by factors that could cause actual outcomes and results to be
materially different. The forward-looking statements speak only as at the date
of this document and the company does not undertake any obligation to announce
any revisions to such statements, except as required by law or by any
appropriate regulatory authority. 
 
 5 - Overall space was up 0.6% year-on-year at the end of the fourth quarter
with space in the UK down (6.4)% year-on-year and International space up 4.6%
year-on-year. 
 
 6 - We will be announcing our Full Year Results on Thursday 19 May 2016. 
 
   
 
   
 
   
 

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 Source: Mothercare Plc via Globenewswire 
 HUG#2003337