Jan 8, 2018
Mothercare shares tumble on profit warning
Mothercare's shares lost a quarter of their value on Monday after the children's goods retailer warned of a sharp downturn in profits following a drop in festive sales. In the latest sign of a tough Christmas and New Year trading period for many retailers on the high street, Mothercare said its same-store UK sales fell 7.2 per cent in the 12 weeks to December 30 compared with last year. The group's shares dived by 25 per cent in early trading to 46.5p. Mark Newton-Jones, chief executive, said Mothercare had witnessed a "Sudden shift" in customers' willingness to spend money on its products after the Bank of England raised interest rates by a quarter-point in November. "Other than Cyber Monday where we grew sales by 8 per cent, the only growth we saw was in the end-of-season sale," he said. Mothercare said adjusted pre-tax profits will be in the range of £1m to £5m in the year to May. This compares with a figure of £19.7m in 2017.
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