Shares in Morthercare surged ahead after the first anniversary of a major turnaround plan was marked by better than expected sales.
The company said it was on a “firmer footing” after making progress on a major three-year restructuring plan that has seen it close more than 50 stores in the last year.
The group overcame poor weather to report flat UK like-for-like sales in the 11 weeks to March 30, compared with a decline of 6% in the previous quarter.
It has shut 56 poorly-performing stores in the past year, with the loss of 7% of its trading space offset by much stronger internet sales after Mothercare’s Direct in Home operation grew revenues 18.2% in the period.
The company now trades from 255 stores, including 59 Early Learning Centre outlets.
It has a long-term plan to reduce its estate to 200 stores by 2015.
However, the firm’s overseas division opened another 115 stores and increased space by 13.5% in the year and sales were up 15.5% in the quarter to the end of last month.
Mothercare’s recent product launches have included its own value clothing range, as well as feeding and pushchair products.
Its Little Bird range, which is backed by TV chef Jamie Oliver’s wife Jools, is being extended this year.
The figures were slightly ahead of expectations, but Numis Securities maintained its forecast of profits in the year to March of £8 million, compared with £1.6m a year earlier.
Chief executive Simon Calver said there was still much to do, but the group was now on a firmer footing.
“In the UK we closed 56 loss-making stores, which is ahead of our plan for the year and is helping us become more efficient.
“UK like-for-like sales were flat for the quarter. Our direct business to customers’ homes was up 18.2% for the quarter as our customers recognised the benefits of our new internet platform, improving delivery proposition and strong promotional offers.
“We continue to be focused on delivering cash margin. International delivered double-digit growth despite the challenges of the eurozone, and we remain excited about the growth potential for all our International regions.”
Matthew McEachran, a retail analyst at N+1 Singer, said: “Given the adverse snow in January and freezing spring conditions, we had feared like-for-like sales would be down 3-4%, so this performance is very reassuring.”
The stock rose more than 8% to 315p in Thursday’s trading.