Mothercare UK sales hit by bad weather

Retailer reports strong third quarter internationally, while UK figures were impacted by adverse weather.
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Mothercare has reported its results for the 12 weeks ended January 1st 2011.

For the third quarter worldwide network sales rose by 9.6 per cent and total group sales were up 0.4 per cent.

Following a strong start to the quarter, the total UK sales slipped by 1.9 per cent. UK like-for-like sales were also down by 5.8 per cent. Direct in Home sales, however, were up 10.2 per cent.

For the year-to-date, worldwide network sales were up 8.2 per cent and total group sales rose by 1.7 per cent.

Total UK sales were down by just one per cent and UK like-for-like sales were down 4.5 per cent. International franchisee retail sales were up 17.4 per cent and Direct in Home sales were up 13.3 per cent.

Ben Gordon, chief executive said: "We continue to make good progress with our key strategic initiatives, including the UK property restructure and the rapid growth of wholesale, direct and international.

"In the UK, after a strong start to the quarter, sales were impacted significantly by the adverse winter weather conditions which caused widespread disruption, particularly in our out of town stores. Direct deliveries were also affected and we cut off Christmas orders early to ensure that our customers received their deliveries on time.

"We estimate that the weather disruption has reduced UK like-for-like sales in the third quarter by approximately four per cent, with toy sales particularly affected, and as a result, full year UK gross margin will be one per cent lower than previous guidance.

"Whilst this will be partly offset by cost savings, including a significant reduction in the share based payments charge, we expect Group Underlying Profit Before Taxation for the full year to be below current market expectations.

"International has had another strong quarter with total retail sales up 17.6 per cent. So far this year we have opened 157 new overseas stores taking the total to 885.

"Worldwide, we now have a total of 1,262 stores in 55 countries with 377 stores in the UK, 390 in Europe, 262 in the Middle East and Africa and 233 in Asia-Pacific.

"Whilst international continues to grow rapidly, we are planning cautiously in the UK where the consumer environment remains difficult."


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