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.
Never Miss a Retail Update!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.”
