Argos like-for-like sales edge up in second quarter
Home Retail Group has reported that Argos achieved its ninth consecutive quarter of positive like-for-like sales growth in the second quarter of the financial year.
In the 13 weeks to 30 August like-for-like sales rose by 1.2% while total sales increased by 1.4% to £901 million.
Home Retail Group said the like-for-like sales growth was boosted by increased trade in electrical products, particularly TVs, video gaming and white goods. The growth in electrical sales offset small sales declines in furniture, homewares and jewellery.
Online sales grew in line with total sales in the quarter and represented 44% of total Argos sales. Within this, mobile commerce grew by 36% and represented 22% of total Argos sales.
During the period Argos added a net 13 stores as part of previously announced trials, including nine Argos concessions within Homebase stores and four small format stores. The Argos portfolio now comprises 747 stores.
Meanwhile, like-for-like sales at Home Retail Group’s Homebase chain edged up 0.1% in the quarter led by growth in big ticket items. However, this was offset by a decline in sales of seasonal products following a strong performance in the category in the same period last year. Sales in the remaining product categories were slightly up.
Total sales at Homebase declined by 2.8% to £390 million which was mainly due to a reduction in net space of 2.9% as a result of a net six store closures in the quarter. Homebase now operates a total of 316 stores.
Home Retail Group chief executive John Walden said: "Argos delivered its ninth consecutive quarter of positive like-for-like sales growth in the second quarter. For the first time in many years, this sales growth was supported by an improved gross margin performance.
"Homebase performed well over its peak trading period, following up its good performance in the first quarter with broadly flat like-for-like sales in the second quarter. This is especially pleasing given that we achieved this against a strong 11% like-for-like in the same period last year.”
Walden said the group expects to deliver full-year benchmark profit in line with current market expectations, but warned that the full-year outcome will be dependent on the Argos chain's Christmas trading period.
He added: "We remain cautiously optimistic about the broader economic environment. Key economic indicators seem to be improving, however retail spending in general has been inconsistent across both product categories and geographies, suggesting that there is not yet a sustainable, broad-based consumer recovery."
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