Home Retail Group raises profit guidance after strong sales at Argos
Home Retail Retail Group has raised its profit guidance for a second time this year after seeing a strong end to the year at Argos.
The company now expects annual profits to be around £90 million after previously saying in January that they would come in £10 million higher at £83 million.
In the eight weeks to 2 March, total sales at Argos grew by 4.3% to £501 million. Net closed space reduced sales by 0.9% with two stores closing in the period. This meant that the store portfolio was reduced by 11 stores over the year, taking the total to 737.
Like-for-like sales increased by 5.2% in the period driven by strong growth in consumer electronics, particularly tablets. The retailer also saw further growth in white goods and core electrical products.
Online sales continued to grow and now account for 43% of Argos’ total sales, up from 40% a year ago. The growth was supported by the retailer's mobile commerce channel in which sales grew by 117% compared to the same time last year.
At the Homebase DIY chain, total sales declined by 2.8% to £191 million with like-for-like sales falling by 1.5%. The retailer closed one store in the period, reducing the store portfolio by five stores over the year to 336. Net closed space reduced sales by 1.3%.
Commenting on the trading, Home Retail Group chief executive Terry Duddy said: "This has been a good outcome to a challenging year with Group benchmark profit before tax now expected to be around £90 million, and our net cash position increasing by approximately £200 million to around £395 million.
"Against a backdrop of subdued consumer spending for the new financial year, we will continue to invest and are focused on delivery of the transformation plan to reinvent Argos as a digital retail leader and the Homebase proposition."
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