Mothercare Shares Slide 30% After Dire Xmas
Some of the biggest names in UK retail have reported varying fortunes for Christmas trading, with Mothercare's shares taking a massive hit after it issued a profits warning.
Mothercare, which operates in 60 countries, said group sales fell 6.1% in the 12 week period to January 4 compared to the same period the year before.
Underlying sales in its loss-making British business, where it is in the middle of a turnaround plan, were 4% lower.
The company blamed the promotional nature of the festive period and lower seasonal footfall.
"As a result of lower UK sales and margin and the international currency impact, full year profits are likely to be below the current range of market expectations," chief executive Simon Calver said in a statement.
The company's share price lost almost a third of its value in the first half hour of trading on the London Stock Exchange in the wake of the glum trading update.
The retailer has suffered in the UK particularly in recent times - largely a result of strong online and supermarket competition - but its international business has gone from strength to strength.
Meanwhile, Sainsbury's said it enjoyed its busiest trading week ever in the run-up to Christmas, helping like-for-like sales in its latest quarter climb by 0.2% - with total sales, including fuel, rising by 2.5%.
Chief executive Justin King said the 14 weeks to January 4 had been a "very tough sales environment" but the supermarket managed to maintain its record of growth - after some had forecast it to fall after 35 successive periods of expansion.
Mr King said the seven days prior to Christmas was the group's busiest ever trading week, with more than 28 million transactions.
The group, which trails market leader Tesco and is battling Asda to be the UK's second biggest grocer, is believed to have been hurt - along with its major rivals - by the continuing growth of discounters including Aldi and Lidl though its overall sales were boosted by convenience stores showing 18% growth.
Two of its competitors also released details of their performances - the Co-op seeing like-for-like growth of 1% in the 13 weeks to January 4 compared with the same period last year.
Waitrose said it had enjoyed its most successful Christmas on record, with like-for-like store sales, excluding fuel, for the twelve trading days ending December 31 up 4.1% on a like for like basis.
Mother and baby products retailer Mothercare did not enjoy such brisk business.
It warned that annual profit would be below current market forecasts, hit by Christmas discounting in its British stores plus weak economic conditions and currency deflation overseas.
Two other chains to update the market on their festive trading on Wednesday were Domino's Pizza and Majestic - the wine retailer.
Domino's, Britain's biggest pizza delivery firm, posted a surge in fourth-quarter sales, rising 10.9% on a like-for-like basis in the UK in the 13 weeks to December 29.
Majestic enjoyed UK store like-for-like growth of 2.8% over the 10 weeks to January 6.
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