Shares of the UK-based retailer Mothercare PLC (GB:MTC) fell over 3%, as the company reported a loss for H1 FY25. The company posted an adjusted loss before taxation of £1.4 million compared to a profit of £1.8 million in the same period a year ago.
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Mothercare is a specialist retailer offering products for parents and young children globally. Its offerings include clothing, baby nursery, feedtime, bathtime, and playtime items.
Mothercare’s Revenue Declines on Middle East Weakness
In the first half, Mothercare’s turnover declined to £21 million from £29 million in H1 FY24. At the same time, its worldwide retail sales through franchise partners fell 12% year-over-year to £121.2 million.
The company attributed this downfall primarily to ongoing uncertainty in its largest market, the Middle East. Additionally, the continued need for franchise partners to clear outdated inventory impacted sales. Meanwhile, the total number of stores in Mothercare’s network dropped to 440 from 500 the previous year.
New Partnership and Financing Drive a Positive Outlook
In October, Mothercare entered into a £30 million joint venture with Reliance Brands Holding UK Limited, a wholly owned subsidiary of India’s Reliance Industries, to support its growth in the South Asian region.
The company also revealed updated financing arrangements, cutting secured debt facilities by 60% to £8 million and reducing annualized cash interest cost by over 75%.
Looking ahead, Mothercare noted that its recent results reflect the uncertain conditions in the Middle East, but it remains committed to its goals and sees multiple opportunities in 2025. The company provided a cautious outlook for the short term due to ongoing conflicts in the region.
Mothercare PLC Share Price History
Over the past 12 months, MTC stock has dropped by more than 27%. Year-to-date, Mothercare shares have fallen by over 40%, primarily due to reduced demand.
