City unfazed by Mothercare like-for-like knock

Chief executive Ben Gordon said snow at the start of the year forced the closure of some stores and difficulty shifting summer lines meant sales were “depressed”.

UK like-for-like sales fell 1.6% in the 11 weeks to March 27 but rose 3% over the year to the same date.

Gordon said that weakness in the UK was counterbalanced by a robust multichannel offer and the continued growth of international operations. “Ecommerce is booming and international is booming,” he said. “We are cautious for the UK but the brand is moving more towards international now.”

Investec analyst Katharine Wynne said: “The UK disappointment is offset by a bounce back in growth in international as the company had expected, so that group sales growth of 5.9% for the full year is marginally ahead of our estimates.”

International like-for-likes rose 2.2% over the year while direct sales climbed 15.3% in the quarter and 16.3% for the year.

Shore Capital analyst Kate Calvert was also encouraged by Mothercare’s strong international position and realignment of its store portfolio. “We continue to believe that Mothercare is a good play on global growth and that its UK position will be strengthened by upgrading its store base quality over the next few years. Management expects stage two of its store portfolio restructuring to deliver £10m of cost savings by 2012,” she said.

Gordon said continued product development and Mothercare’s wholesale business were also good growth opportunities.