Argos reports 2.8% decline in Q2 LFL sales

Home Retail Group, the UK’s leading home and general merchandise retailer, today updates on the trading of its second financial quarter covering the 13 weeks to 29 August 2015.

Argos:

Total sales at Argos declined by 0.4% to £897m. Net new space contributed 2.4% with the store portfolio increasing by 52 stores to 840. This increase comprised 44 digital concessions within Homebase and 8 digital concessions within Sainsbury’s.

Like-for-like sales declined by 2.8% in the quarter. As anticipated, sales of electrical products continued to decline principally driven by TVs, tablets and white goods. These declines more than offset a good performance in toys.

Internet sales for the quarter represented 46% of total Argos sales, up from 44% for the same period last year. Within this, mobile commerce sales grew by 11% to represent 25% of total Argos sales, up from 22% in the prior year.

John Walden, Chief Executive of Home Retail Group, commented:

“Argos delivered an improved sales performance in the second quarter. It made good progress with new stores, opening more than 50 digital concessions within Homebase and Sainsbury’s, which have generated encouraging early results. Consistent with our previous guidance, Argos’ sales continued to be adversely impacted by the performance of a number of key electrical product categories as well as weaker overall market conditions in August.

“Homebase performed well across its peak trading season, delivering good like-for-like sales growth in both quarters of the first half, while continuing its progress on both its store closure programme and the Productivity Plan more broadly.

“The outcome for the Group’s full-year generally depends upon the important Christmas trading period at Argos which, this year, seems less predictable than usual due to a less certain promotional environment. Our teams have made solid progress preparing for this period, including substantially completing the technology and operational steps necessary to introduce new store collection and home delivery propositions to our customers. We will be making increased marketing and promotional investments to launch these propositions and we expect customers to increasingly embrace them over time.”

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Source: Home Retail Group
www.homeretailgroup.com