Mothercare predicts loss after sales drop 38%
Mothercare predicted it would suffer a small annual loss after sales dropped 38% in the first nine months of the year.
Net retail sales fell by £155m to £258m in the three quarters to 2 January, Mothercare said. The group forecast full-year sales of at least £320m and invoiced shipments of £80m though it warned some shipments could be delayed by delays transporting goods from Asia.
The mother and baby product company said sales at its franchise partners fell sharply during the Covid-19 crisis and that, excluding Boots, almost 90% of partners' retail stores were now open. The company said Covid-19 reduced sales by about a third in the full financial year.
The company has been carrying out a major restructuring while trying to deal with the Covid-19 crisis. It published its trading update alongside proposals to switch its listing to AIM and covert shareholder loans to new shares.
"Due to reduced revenues following the impact of Covid-19 and the one-off costs associated with the restructuring and assuming no further material restrictions on our Franchise Partners' operations, the group continues to expect to make a small EBITDA loss for the full-year," Mothercare said.
Mothercare shares fell 4.8% to 11p at 08:25 GMT.
Though further restrictions could be imposed the company said it could see an improved picture for the rest of the financial year.