The group, which has 280 shops in the UK, saw underlying pre-tax losses fall to £600,000 from £4.4 million a year earlier as it returned to sales growth in the second quarter for the first time in two and a half years.
Sales of lower priced clothes were so popular that Mothercare had to order more stock.
Chief executive Simon Calver is leading a turnaround, which will see store numbers reduced from 311 to 200 by 2015. He said consumer confidence in the UK remains weak.
In the half year to October 13, the group closed 31 shops, including six Mothercare shops and 25 Early Learning Centres. UK like-for-like sales bounced back in the second quarter with a 0.3% rise, after a 3.4% fall in the first three months.
As well as a good response to its value range, Mothercare has also seen strong demand for its premium offering, including the Little Bird range backed by Jools Oliver, wife of the TV chef Jamie. Its Baby K range, by singer Myleene Klass, also continued to perform well.