Turnaround efforts pay off as Mothercare UK sales rise 1.9%
Retailer Mothercare has notched up further UK sales growth thanks to turnaround efforts, while the weak pound offset flagging overseas trade.
The baby care chain posted a 1.9% rise in UK like-for-like sales for its first quarter to July 8, although total sales fell 1.8% as it axed more stores under a sweeping overhaul.
Mothercare saw international sales rise 2.2%, but plunge 8.3% with the boost from the Brexit-hit pound stripped out.
The group said it was knocked by ongoing woes in the Middle East, where consumer confidence has been impacted by low oil prices and fears of an economic slowdown.
Its update also showed online sales growth slowing sharply in the UK, to 3.3% in the 15-week quarter, although Mothercare insisted this was not the start of an "underlying permanent shift in customer behaviour".
But the group joined retail rivals in cautioning over an "uncertain" consumer outlook as shoppers remain under pressure from Brexit-fuelled inflation.
Shares fell 5% after the update.
Chief executive Mark Newton-Jones said: "We have continued to make progress in the UK during the period.
"We have seen customers respond well to our end-of-season sale, which we entered with less stock than last year."
He added: "We are about to launch our autumn ranges, but it remains uncertain how consumers will respond to inflation."
Mothercare is shutting a swathe of high street stores under a revamp plan led by Mr Newton-Jones.
It announced plans in May to slash its UK store estate further to between 80 and 100 shops as it focuses on key locations nationwide, which will act as specialist advice and service points to support online sales.
The group's turnaround efforts have been helping return the UK arm to health, with the group seeing its first underlying profit for six years in the final half of its financial year - with a surplus of £4.4 million.
The UK remained loss-making overall in the year, with underlying losses of £4.4 million against losses of £6.4 million the previous year.