Mothercare saw total group sales fall 5.2% during the first quarter

Mothercare saw total group sales fall 5.2% during the first quarter

UK mother, baby and children's goods retailer Mothercare has seen its share price drop after reporting a decline in first-quarter sales, highlighting there is still more work ahead for its turnaround to take hold.

In a trading update today (23 July), the company said total group sales fell 5.2% during the 15 weeks to 11 July, compared to the same period last year, with total UK sales down 0.9%. However, like-for-like sales in the UK edged up 1.3%, while online sales increased 23.9% year-on-year.

The retailer's end of season sale was delayed to try to sell more at full price, with margins increasing as a result.

International retail sales were down 1.3% in constant currencies, as increased levels of economic risk impacted consumer confidence. Currency headwinds further impacted international retail sales in actual currencies, which fell 4.8% year-on-year.

Asia and Europe both saw growth in constant currencies, with Latin America and the Middle East weaker. Mothercare said the Middle East was impacted by a reduction in markdowns, and the delay into the second quarter of the end-of-season sale.

Nonetheless CEO Mark Newton-Jones said: "Overall our trading is in line with expectations with the UK making a good start to the year and international seeing some macro volatility as anticipated."

He added: "It is still early days in our turnaround and we recognise that there is still much to do. Our vision remains clear - to be the leading global retailer for parents and young children."

Commenting on the results, Conlumino analyst Rebecca Marks noted: "Although it is clear progress has been made into the second year of its recovery plan, the more negative economic outlook in its overseas markets has the potential to weaken the stable base on which Mothercare’s previous full year of trading was built.

"What this update highlights, is the importance of a sustained recovery in the UK. While the UK market certainly looks in better shape, it is likely to be a slow process to bring the business back to firmer footing."

Mothercare's share price was down 7.8% to GBP264.50 pence at 10:20am BST.