British-based baby and children's clothing and equipment retailer, Mothercare PLC, admitted Tuesday it now expects full-year profits to be below market expectations after problems at its warehouse hit stock availability in the run-up to Christmas.

The company said it does not expect profits to be more than £4 million and revealed total sales for the 13-week period ended January 11 fell 5.9 per cent compared to last year, or by four per cent on a like-for-like basis.

The company said warehouse problems had been a major setback but did reveal some good news in that sales of its autumn/winter clothing ranges showed positive growth during the 13 week Christmas trading period.

"Sales were badly affected by the resulting stock availability issues which arose in the run-up to Christmas," the company said today, adding that the setback hit toy sales which fell sharply compared to the year-ago period.

Mothercare chief executive, Chris Martin, who said his company would continue to use an extra warehouse for at least another year, added: "We can now move forward once again and get Mothercare's recovery program back on track."