Shares in the retailer dove over 25% on Monday morning as cruciail Christmas sales numbers slipped.
Companies: Mothercare plc
Mothercare (LON: MTC) has seen over a quarter of its value wiped off in early morning trading off the back of its trading update today.
The Group reported a slip in UK sales by 7.2% including a 6.9% decline in crucial online sales over the Christmas trading period. International sales were also down 3% on a CC basis despite a jump of 8% in online sales.
As a result, MTC CEO Mark Newton-Jones warned on the Group's full-year profits...
"We are not anticipating any improvement in the short-term market conditions for the UK and on this basis, the adjusted group profit for the year is likely to be in the range of £1-5m."
Prior to today's update, consensus, as seen on Stockopedia, was forecasting Net Profits of c. £13m in FY18.
Shares in MTC dove quickly after trading opened, down 27% to 45p at the time of writing. This is a price drop of over 60% compared to January 2017's share price after the stock had a forgetful year in 2017. The Group's Interims back in November didn't help, sending shares down 16%.
Today's trading update is representative of the overall picture for UK retailers over the Christmas period, many of whom who have suffered from the rise of the online retail giants and increased discounting.
Commenting on its discounting strategy over Christmas, Mr Newton-Jones went on to say...
"In our UK business, we took a conscious decision to remain at full price to protect our brand positioning prior to Christmas but to then discount more heavily in the end of season sale. We have subsequently seen good progress with strong sell-through rates on Autumn Winter clearance lines albeit these carry lower margins and will lead to a further reduction in full-year margin as a result."
Mothercare, much like the rest of the UK retail industry, has had to swiftly adapt and diversify to keep up with the rise of the likes of Amazon. The Group has reduced its brick-and-mortar presence whilst adapting its locations to include more in-store "experiences" such as parent meet-ups, play areas for kids and in-store services such as car seat fitting.