Home Retail Group raises profit expectations after sales growth at Argos and Homebase
Home Retail Group, the owner of Argos and Homebase, has said its annual profits should come in ahead of expectations after both retail chains enjoyed a strong end to their financial year.
Like-for-like sales at multi-channel retailer Argos rose by 5.2% in the final eight-week trading period in the year to 1 March 2014. Total sales grew by 5.2% to £526 million.
Home Retail Group said electrical products continued to deliver a positive sales performance at Argos, driven by growth in video gaming, TVs, small domestic appliances and white goods. Sales across the remaining product categories were broadly flat year-on-year with the exception of jewellery which saw a small decline.
For the full year, online represented 44% of total sales at Argos, which was an increase of 42% on the same period last year. Within this, mobile commerce sales grew by 89% to represent 18% of total Argos sales
Meanwhile the Homebase DIY chain saw like-for-like sale increase by 9.3% during the eight week period driven by further growth in big ticket sales as well as growth across the remaining product categories. Total sales climbed by 6.9% to £203 million.
For the year to 1 March 2014, sales at Argos rose by 3% to £4 billion while Homebase sales increased by 4.1% to £1.5 billion.
As a result of the trading performance, Home Retail Group now expects group benchmark profit before tax to be slightly ahead of the top end of the current range of market expectations of £107 million to £111 million.
Outgoing chief executive Terry Duddy said: “The positive sales performance in the last few weeks of our financial year concludes a good year for both Argos and Homebase, with both businesses having delivered like-for-like sales growth throughout the year.
“We have made good progress with the investment plans in both businesses during the current financial year and we have a clear agenda for growth. However, although there are signs that economic conditions may be beginning to improve, we will continue to plan for a subdued consumer environment.”
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