(Adds shares, comments, writes through)
By Neil Maidment
LONDON, April 10 British baby products retailer
Mothercare said on Thursday better fourth-quarter
trading at home and overseas had put on track to hit annual
profit forecasts, boosting its shares.
In Britain, which accounts for about 70 percent of its
sales, Mothercare has pushed to close underperforming stores,
revamp others and expand online amid fierce competition from
Internet rivals and supermarkets.
It said sales at UK stores open more than a year fell 0.3
percent in the 12 weeks to March 29.
That marked a strong improvement from a 4 percent decline in
the third quarter which had prompted a full-year profit warning.
The shares have fallen 60 percent since the January warning
but jumped 16 percent on Thursday, trading up 14 percent at
186.25 pence as of 0803 GMT.
Mothercare has been helped by a good reaction to its
spring/summer clothing range and more exclusive products in home
"After a difficult Q3, it is encouraging to note that we
have seen some improvement in trading for both International and
the UK," Chairman Alan Parker said in a statement.
In its better-performing international arm, sales in
constant currency increased by 9.8 percent, outstripping a rise
of 3.3 percent in the third quarter, although currency weakness
pulled that down to a 1.8 percent fall on a reported basis, with
India, Indonesia, Russia and Turkey particularly effected.
The group, which named ex-Shop Direct boss Mark Newton-Jones
as its interim chief executive last month after Simon Calver
quit in February, said it expected UK trading to remain tough
and the effects of currency devaluation overseas to persist.
It said it now expected to meet analyst forecasts for profit
for the year to March 2014.
According to Reuters data, analysts expect the company to
post a pretax profit of 8.3 million pounds ($14 million), ahead
of a restated 5.9 million a year earlier.
"Investors will take heart from an improvement in Q4 trading
trends and no further downgrades," Peel Hunt analyst John
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.
The group said it would continue to close loss-making UK
stores, including some of its standalone Early Learning Centre
stores, but said that chain was not up for sale.
It said it remained upbeat on its prospects overseas, where
it expects double-digit space growth for the medium-term.
($1 = 0.5971 British Pounds)
(Editing by Sarah Young and Jason Neely)