* Q2 sales up 7 percent after 9.4 percent in Q1
* Q2 British sales up 2 percent, international up 23 percent
* To open 5-6 stores in China in H2
* To enter Australia and South Africa in H2
* Shares down 3.2 percent after recent strong gains
(Adds CEO, analyst comments, shares, detail, background)
By Mark Potter
LONDON, Oct 15 (Reuters) - Mothercare, the British mother and baby products retailer, posted a slight slowdown in second-quarter sales growth on Thursday, in line with expectations, and said it was stepping up expansion in China.
Chief Executive Ben Gordon told Reuters the group planned to open five to six stores with its Chinese joint venture partner in the second half of its financial year, following a trial of two stores last year and two further openings this year.
"Nineteen million babies a year (are born in China), so clearly the opportunity is huge," he said in a telephone interview, adding the group would spell out its longer-term ambitious for the country with interim results in November.
Mothercare, which trades from over 1,000 shops in more than 50 countries, posted a 7 percent rise in second-quarter sales, down from a 9.4 percent increase in the first quarter, which benefited from warm spring weather and the timing of Easter.
"We are warming to the international opportunity, which accounts for about 20 percent of trading profits, but we believe the potential has been fully factored into the share price," said Seymour Pierce analyst Freddie George
"In addition, the UK business is now looking more mature," he added, keeping a "sell" rating on the shares.
Mothercare shares have outperformed the UK general retail index by 9 percent this year. At 0850 GMT, they were down 3.2 percent at 597.5 pence, valuing the business at about 517 million pounds ($826 million).
Many of Britain's retailers have been struggling in the recession, though there have been signs recently that a recovery is underway. An industry survey on Tuesday showed a 2.8 percent rise in like-for-like sales in September.
Stationer WH Smith on Thursday reported an 8 percent rise in annual profit.
Mothercare has coped better than most helped by selling essential products to parents, strong growth in emerging markets, home shopping and the Internet, and the integration of the Early Learning Centre (ELC) brand it bought in 2007.
PUSHCHAIRS AND ROBOTS
Gordon said solid trading had helped to offset increased costs related to pensions and the weakness of sterling, and did not expect analysts to change their profit forecasts.
"Given the considerable 'non-trading' headwinds, we leave our forecasts unchanged but continue to recognise the remaining UK opportunity and remarkable international growth story," said Numis analyst Andrew Wade, with an "add" rating on the stock.
Gordon said he was confident about prospects for the rest of the year, and had particularly high hopes for a new pushchair, Mothercare Spin, which can easily switch the way a child is facing, the autumn/winter Baby K clothes collection by musician and model Myleene Klass, and a new toy robot from ELC.
Mothercare said sales at British stores rose 2 percent in the 13 weeks to Oct. 10 on the same period last year, including a 3 percent increase in stores open at least a year.
International sales rose 23.2 percent, while home delivery "Direct in Home" sales were up 11.3 percent.
The firm said it would enter Australia and South Africa in the second half of its financial year.
Asked whether he would be interested in moving to Marks & Spencer, which is looking for a new chief executive, Gordon said: "I'm just happy where I am." ($1=.6259 Pound) (Editing by Hans Peters and Jon Loades-Carter)