Mothercare produced evidence today that it remains on track to be the retail success story of the year, with sales still rising at a company that has been revitalised.

With much of the High Street battling to survive, the prams-to-nappies group has reclaimed its position as the shop of choice for pregnant women and young mothers.

In the fourth quarter, sales rose 5.6%, a figure that was boosted by a strong performance from the overseas and home shopping arms.

UK like-for-like sales are up 3.7% in the 11 weeks to March 2009, leaving the company in line to meet City profit forecasts for the year of around £36 million.

That's the 15th consecutive quarter that Mothercare has reported rising sales, though it admits margins are starting to come under pressure.

Chief executive Ben Gordon said: “We continue to manage the business tightly.”

Gordon arrived six years ago at a business that had long been in the mire — chief executives came and went, and the City had largely written the company off.

It now has more than 1000 stores, almost half of which are overseas. A bold deal to buy the Early Learning Centre for £85 million two years ago seems to have paid off, expanding the company into toys.

The flagship Oxford Street store, once barely profitable, now makes £1 million a year on its own.

The shares have been the best performing retail stock by some way. They are down a little from a 12-month high of 417p, but today added 11/2p to 3971/2p.

Matthew McEachran at Singer said: “Mothercare remains one of our favoured retail stocks on a medium-term basis, from both a defensive and growth stand-point.”

David Stoddart at Altium Securities said: “UK sales growth in the fourth quarter was stronger than we expected, perhaps reflecting benefits from the failure of competitors Woolworths and Adams.”