Mothercare has issued a profit warning after the winter weather hit its business. Like-for-like sales in the last three months of 2010 fell 5.8% as the freezing conditions caused "widespread disruption". Mothercare said that the poor weather had reduced UK like-for-like sales in the third quarter by about 4%, and that its out-of-town shopping centres had particularly suffered from the disruption.
And it warned that annual gross profits from the UK would be lower than the £41m previously stated, adding that the consumer environment remained "difficult". However, the firm has continued to see strong growth in its international business where sales grew by 17.6% between September and January compared with same period a year earlier. "Despite growing international sales, an already challenged UK business now forms another victim of the cold weather," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.
"The group's shift towards out-of-town premises appears to have worked against it, whilst like rival Next, the fragilities of time critical direct online Christmas sales have been exposed." Earlier this week, Next said the December snow had cost it £22m in Christmas sales, but that profits remained on target. Earlier this week, PMI figures for the manufacturing sector indicated it had enjoyed the strongest growth in 16 years in December.
"There is a strong indication that UK economic growth is completely reliant upon export sales while domestic demand has wilted," said Markit's chief economist, Chris Williamson.
Source: http://www.fashionunited.co.uk |
