// Mothercare reports an increase in sales despite Covid making a “significant impact”
// Online retail sales represented 10% of total retail sales
Mothercare has released its trading update for the year ending 26 March 2022 with expectations to be ahead of market views, despite revenue still being hit by Covid related issues.
The baby retailer said adjusted EBITDA for the year is expected to be in the range of £11.5m and £12m.
Revenue for the year increased 7% to £385m, it said, noting that it has suffered issues related to its franchisee markets.
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Retail sales remain below the levels the retailer would otherwise expect and are around 25% down on the total retail sales for similar territories in the year before the pandemic.
Online retail sales represented 10% of total retail sales, slightly below its 12% the previous year reflecting lower levels of Covid-19 restrictions on store openings.
The London-listed retailer said it continues to expect to suffer a £6m hit to its fiscal 2023 earnings as a result of the suspension of sales in Russia.
Approximately £88m of Mothercare’s retail sales came from the country in the year, it said.
Last month, alongside rafts of western businesses, Mothercare announced that its retail operations in Russia had been suspended across online and in stores.
The retailer also revealed that £88 million of its annual retail sales came from Russia and while looking ahead, the business expects to enter the new financial year with a “degree of cautious confidence”, adding that it has now excluded Russia from its forecasts given the uncertainty around when stores may reopen.
Mothercare expects Russian store closes to impact its results by approximately £6 million for the financial year 2023.
Mothercare chairman Clive Whiley said: “Whilst we must now deal with the impacts of the suspension of our franchise partner’s operations in Russia, we retain the resilience to deal with this additional challenge satisfactorily. We continue to drive initiatives designed to maintain momentum in improving profitability particularly when we return to more normal pre-pandemic levels of business.”
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