Shares in Mothercare, the U.K. baby-products retailer, experienced a significant drop of 16% after announcing a decline in pretax profit for the fiscal year of 2023. The decrease is primarily attributed to the company's withdrawal from the Russian market.

As of 0733 GMT, shares are currently down 0.65 pence, standing at 3.50 pence.

Mothercare revealed on Friday that its pretax profit plummeted to £2.2 million ($2.7 million) for the fiscal year ending on March 25, compared to a previous figure of £11.1 million in fiscal 2022. This decline directly resulted from the company's decision to exit the Russian market.

Additionally, the company's revenue also experienced a decrease, dropping to £73.1 million from £82.5 million in the previous year. Such a decline was further echoed in worldwide retail sales, where sales by franchise partners to end customers fell from £385.3 million to £322.7 million.

Despite these challenges, Mothercare's Chairman, Clive Whiley, expressed optimism about the future of the company, stating, "There is still work to do, but we are excited about the future prospects for Mothercare as we leave behind the turmoil of recent years."

During the current fiscal year, Mothercare's franchise partners have reported total retail sales of £132.5 million so far, representing a decline compared to £156.8 million in the previous year. This downturn is primarily attributed to difficulties faced in Middle Eastern markets.

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