Mothercare Plc : Trading Statement

MOTHERCARE PLC

Q2 trading update

Mothercare plc, the leading global retailer for parents and young children, today issues the following trading update, which covers the 13 week period to 10 October 2015.

Trading remains in line with our full year expectations. The UK is continuing to benefit from our digital and full price trading strategy while International has returned to underlying growth, although continues to face significant foreign currency headwinds.

International highlights

• International space up 6.6% year-on-year despite the c2% reduction during Q4 last year. During the quarter our International business saw the opening of 11 stores and ended the period with 1,310 stores and 3.0m sq.ft of retail space
• International retail sales in constant currency up 5.6% benefitting, as previously reported, from the delayed end-of-season sale into Q2 due to the timing of Ramadan and Eid. Currency headwinds continued to have an impact and retail sales in actual currencies were down (5.3)%
• Europe, the Middle East and Latin America saw growth in constant currencies with Asia weaker than last year

UK highlights

• UK grew like-for-like sales by 6.5% as a result of our digital strategy growing online sales by 20.4% and delaying our end-of-season sale into Q2
• We continued to sell a high proportion of  our product at full price, leading to further growth in gross margins
• Reconfiguring of the UK store portfolio continued with ten closures, three openings and six refurbishments completed in the quarter. Our refurbishment programme will see c20% of stores modernised before Christmas. UK now trading from 173 stores and 1.6m sq.ft. of retail space

Group highlights

• Worldwide sales down (2.8)% and Total group sales down (7.1)% reflecting ongoing store closures in the UK and foreign currency headwinds for our International business

Group performance for 13 weeks to 10 October 2015

					13 weeks:	28 weeks:
	FY2015			FY2016	10 October 2015
	Q2	Q3	Q4	Q1	% change year-on-year
International					Q2	H1
International retail sales in constant currencies (1)	8.6	14.4	11.4	(1.3)	5.6	1.8
International retail sales in actual currencies (1)	(2.2)	5.4	5.5	(4.8)	(5.3)	(5.0)
International space (change in sq.ft.)	12.9	11.5	9.0	7.9	6.6	6.6
UK
Total UK sales	(1.2)	(1.9)	1.5	(0.9)	1.8	0.4
Online sales	23.7	16.1	31.8	23.9	20.4	22.1
UK like-for-like sales (1)	2.1	1.1	5.1	1.3	6.5	3.8
UK space (change in sq.ft.)	(3.8)	(4.2)	(4.5)	(5.3)	(7.4)	(7.4)
Group
Worldwide sales (2)	(1.7)	2.2	4.1	(3.5)	(2.8)	(3.1)
Total group sales (3)	(0.1)	(2.9)	(1.0)	(5.2)	(7.1)	(6.1)

Mark Newton-Jones, Chief Executive Officer of Mothercare plc, said:

"The second quarter results are in line with our full year expectations. The UK is continuing to benefit from our strategic initiatives both online and in store, while International has seen the expected improvement in trading." 

"Whilst International markets remain volatile, our franchise partners continue to have confidence and have added further space during the period. However, foreign currency continues to be a significant headwind."

"In the UK our digital strategy resulted in strong double-digit growth of online sales, which in turn contributed to the growth in like-for-like sales. Our improved and exclusive product ranges in Home & travel and Clothing & footwear are supporting our full price trading approach. As a result we were able to go into our end-of-season-sale with less product at discount and so delay the start of the sale until the second quarter. With Christmas now quickly approaching we are gearing up to our peak trading period."

"These results give us further confidence in our strategy, but there is much more to be done. 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:

Lorna Else, Interim Director of Communications, Mothercare

John Olsen/Simon Hockridge, MHP Communications                            020 3128 8789

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 1.3% year-on-year at the end of the second quarter with space in the UK down 7.4% year-on-year and International space up 6.6% year-on-year.

6 - We will be announcing our half year results on Thursday 19 November 2015.

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Source: Mothercare Plc via Globenewswire

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