Published on 14 - January - 2010
Home Retail Group reports solid interimsHome Retail Group, parent company of both Homebase and Argos reported its interim figures for the 18 weeks to January 2 this morning, with both retail chains showing an increase in sales...just.
They reveal that like-for-like sales at Homebase increased 4% in the period with total sales of £501m. Almost all categories saw a sales rise, according to the statement, but the boost was led by big-ticket purchases, particularly kitchens.
The chain closed two stores in the period and opened one, reducing the number of stores in the portfolio to 349.
Argos, however, only managed a like-for-like sales growth of 0.1% in the 18 weeks, which included the key Christmas period. Televisions and white goods were worthy of note in terms of performance, and the statement said the trend in furniture and homewares 'has continued to improve'.
The internet accounted for 35% of Argos' sales, compared with 30% the year before, with three quarters of online orders being Check & Reserve transactions, up 34% on the previous year.
HRG chief exec Terry Duddy said: "Argos has performed ahead of our plans in its most important trading period, and Homebase trading has continued to be strong." He added that, thanks to cost management, the company expects pre-tax profit for the full financial year to be around £20m ahead of the general market expectation of £265m.
Despite the solid set of figures from Homebase, the City was not so impressed, mainly due to Argos' flat sales performance. Credit Suisse's 'Underperform' rating, for example, remains unchanged. "We believe the flat lfl performance at Argos is likely to be taken as disappointing and continues to underpin our view that the model is starting to come under increasing pricing pressure. We stick to our 'Underperform' recommendation," said Credit Suisse this morning.
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