The Home Retail Group revealed today that sales at its core Argos business fell at a slower rate in its first quarter, while sales at its Homebase chain were severely dented by the recent wet weather. The group said trading had been volatile over the period but it was currently comfortable with market expectations for full-year underlying pre-tax profit.
"We will continue to plan cautiously, managing robustly both the cost base and the cash position of the Group while prioritising our investment in the ongoing development of our multi-channel capabilities," said chief executive Terry Duddy.
Like-for-like sales at Argos fell just 0.2% in the 13 weeks to 2 June. That compares to a fall of 8.5% in the previous quarter and exceeded analysts' forecast of a 4% decline. Total sales at Argos grew by 0.2% to £819m. Net new space contributed 0.4% and two stores closed in the quarter reducing its store portfolio to 746.
The group said that consumer electronics saw an improved performance at Argos with sales level on the previous year, driven by continued strong growth in laptops and tablets which offset the sales declines in the TV, audio and video gaming categories for which the markets remained challenging. The chain also saw 25 basis point gross margin decline, driven by the adverse sales mix and price cuts.
At Homebase, like-for-like sales at its 341 stores plummeted 8.3%, broadly in line with analysts' expectations but worse than a fourth quarter fall of 6.5%. Total sale declined by 8.1% to £421m, although gross margin was up around 225 basis points, driven by a combination of a reduced level of promotional sales, currency benefits and reduced shipping costs.
NamNews - Tuesday 19th June 2012