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| Argos-owner Home Retail Group sees shares jump on strong sales | Argos-owner Home Retail Group sees shares jump on strong sales |
| (35 minutes later) | |
| Shares in Home Retail Group have jumped 14% after the firm revealed 2.7% like-for-like growth at its Argos chain. | Shares in Home Retail Group have jumped 14% after the firm revealed 2.7% like-for-like growth at its Argos chain. |
| Consumer electronics were the major driver of sales at Argos over the past four months, where 42% of business is now conducted online. | Consumer electronics were the major driver of sales at Argos over the past four months, where 42% of business is now conducted online. |
| href="http://www.homeretailgroup.com/news-and-media/news.aspx?smlbus=1690&article=4602" >The group also said the decline at its DIY chain Homebase slowed to a 3.9% drop in sales versus a year ago. | |
| Chief executive Terry Duddy said Argos' strong sales meant pre-tax profits were on course to beat forecasts. | Chief executive Terry Duddy said Argos' strong sales meant pre-tax profits were on course to beat forecasts. |
| He said profits could be £10m higher than the £73m previously expected on average by market analysts. | He said profits could be £10m higher than the £73m previously expected on average by market analysts. |
| "Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focused on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition," he said. | "Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focused on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition," he said. |
| Margins | Margins |
| The sales figures for both units exclude the impact of store closures. Including this effect, sales in the 18 weeks to 5 January rose 1.6% at Argos, and fell 4.5% at Homebase. | The sales figures for both units exclude the impact of store closures. Including this effect, sales in the 18 weeks to 5 January rose 1.6% at Argos, and fell 4.5% at Homebase. |
| Three more Homebase stores closed during the reporting period, cutting the total number to 337. The number of Argos stores held steady at 739 in the last four months, following closures earlier last year. | Three more Homebase stores closed during the reporting period, cutting the total number to 337. The number of Argos stores held steady at 739 in the last four months, following closures earlier last year. |
| Home Retail Group said profit margins at both units were squeezed, but for different reasons. | Home Retail Group said profit margins at both units were squeezed, but for different reasons. |
| At Argos, profits were hurt by the shift in customer demand to lower-margin electronics - a problem also reported by Dixons Retail, the owner of Currys and PC World. | At Argos, profits were hurt by the shift in customer demand to lower-margin electronics - a problem also reported by Dixons Retail, the owner of Currys and PC World. |
| Margins at Homebase were cut by more aggressive price discounts as part of the chain's clearance sales. | Margins at Homebase were cut by more aggressive price discounts as part of the chain's clearance sales. |