Laura Ashley reports better than expected growth in sales

Fashion and furnishings retailer Laura Ashley reported Friday growth in retail sales for the first 19 weeks of the second half that came in marginally ahead of analysts' forecasts.

The company said like-for-like (LFL) sales were up 4.9% for the period ended December 8th (Seymour Pierce forecast: 4.0%), with a total retail sales increase of 4.2% year-on-year.

Laura Ashley's e-commerce sales grew 22.6% , driven by the introduction of a mobile site offering the complete range of the company's products and by increased overseas deliveries.

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The result was slightly stronger than the first half rise of 21.4%, buoyed by improvements to the website in autumn 2011.

Encouragingly, gross margins were expected to be only marginally lower in the year after dropping 2.5% points in the first half when it was affected by adverse product mix and an increase of discounting, according to Seymour Pierce Research.

The broker also highlighted the high performance achieved by the company in its core categories over the past three years. That momentum continued, with home accessories up 10.4% and decorating up 5.7% in the first half 2013 sales report.

Seymour Pierce was predicting a fiscal year 2013 pre-tax profit of £20m for the retailer.

Laura Ashley had opened five and closed three stores during the financial year to date.

Shares were up 0.92% to 27.50p at 09:50 on Friday.

RD