Home improvement chain's figures for first quarter reveal an 8.1% decline in total sales to £421m, impacted by disappointing sales of seasonal goods in poor weather, while HRG stablemate Argos recorded a 0.2% increase.
Homebase's like-for-like sales dipped 8.3% for the 13 weeks ended June 2, principally driven, said the company, by a 15% decline in sales of seasonal products, which accounts for 40% of its total revenue. Big ticket sales were also down, as the market remains "challenging", while sales across other categories in the business were level during the period.

Despite the drop off in sales, Homebase did report a 225 basis point improvement on its gross margin in Q1, boosted by a reduction in promotional activity, as well as reduced shipping costs and favourable currency rates.

Meanwhile, general merchandise chain Argos posted a 0.2% increase in total sales to 819M for the quarter - a positive after months of declines. Figures were down marginally on a like-for-like basis at -0.2%, again representing a significant improvement on previous performances, compared with LFL declines of -9.6% posted in Q1 last year.

The sales uplift was attributed to a pick up in the consumer electronics division, while sales via Argos' online check and reserve service grew 24% and now accounts for 29% of the retailer's total sales. Total multi-channel sales also represented a greater share of Argos' total sales, up to 51% from 46% a year earlier, as the retailer strengthens this side of its business.

Argos boss John Walden is currently undertaking a full review of the business with the help of OC & C Strategy Consultants.

Home Retail Group chief executive Terry Duddy said of the results: "Over a particularly volatile trading period, Argos had a solid start to the year supported by its multi-channel performance, while at Homebase, the poor weather conditions adversely impacted seasonal product sales. At his stage of the financial year we are comfortable with current market expectations for full year benchmark profit. We continue to plan cautiously, managing robustly both the cost base and cash position of the group, while prioritising our investment in the ongoing development of our multi-channel capabilities."