Homebase and Argos slow sales decline

Home Retail today said sales had fallen less than analysts expected at Argos and Homebase in the run-up to Christmas, and forecast yearly profit in line with its predictions.

The company said on it expected full-year pre-tax profit to be around the mid-point of its £250 million to £275 million predictions.

Sales at Argos stores open more than a year fell 4.9% in the 18 weeks to January 1, which includes its fiscal third quarter, compared with an expected 5.7% decline. Sales had dropped 5% in the second quarter.

Homebase like-for-like sales fell 1.2%, compared with an expected fall of 2% and with flat second-quarter sales.

Argos gross margin fell 25 basis points on increased clearance activity, while reduced promotional activity helped boost Homebase gross margin by 75 basis points.

Shares in Home Retail, which last September lost its place in the FTSE 100 index of leading companies, have lost 29% of their value over the last year, as cash-strapped low-income shoppers trimmed spending.

Source : London Evening Standard