Mothercare expects FY EBITDA to be ahead of forecast

Mothercare said it expects its EBITDA for the year just ended to be ahead of previous forecasts, but warned that the closure of its Russian stores will impact the business going forward.

In its pre-close trading update for the year ended March 26, the British maternity and babywear specialist reported net worldwide sales of 385 million pounds, up 7 percent compared to the previous year.

Despite the growth, that figure was still below pre-pandemic levels as the company continued to be “significantly impacted” by Covid-19.

Mothercare said retail sales were around 25 percent below the total retail sales for similar territories in the year before the pandemic.

Online retail sales represented 10 percent of total retail sales, slightly down on the 12 percent for the previous year when there were more Covid restrictions, but still above pre-pandemic levels.

On a brighter note, the company upped its EBITDA before adjusting items outlook for the year, and now expects it to be in the range of 11.5 million pounds to 12 million pounds.

Russia impact

Last month, Mothercare announced it had put its Russian operations on hold following the country’s invasion of Ukraine.

Its franchise partners have a total of 116 stores in Russia.

The group revealed Monday that 88 million pounds of its annual retail sales came from Russia and the territory directly contributed around 5.5 million dollars to its adjusted EBITDA for the year.

Looking ahead, the company said it approaches the new financial year “with a degree of cautious confidence, notwithstanding that we have completely excluded Russia from our forecasts given the uncertainty around when stores may reopen”.

It said it expects Russian closures to impact the company’s FY23 results by 6 million pounds.