Home Retail raises full-year profit expectations

17th Jan 2013 08:40

Britain's largest household goods retailer, Home Retail, raised its full-year profit expectations on the back of increased sales at its Argos business over the Christmas period. Sales at Argos stores open more than a year rose 2.7% in the 18 weeks to January 5th, ahead of a consensus forecast for a 0.2% increase and a 1.4% climb in its second quarter. The results were driven by growth in sales of electrical products, white goods and toys as consumers picked up gifts during the festive season. Homewares and jewellery were the weaker performers. The group said internet sales accounted for 42% of the catalogue merchant's total sales, with mobile commerce sales up by 125% thanks to the popularity of new tablet devices. While Home Retail benefited from the strong performance at Argos its Homebase business was a different story. Total sales at the home improvement and garden chain declined by 4.5% to £453m as the company closed three stores during the period, reducing its portfolio to 337. Like-for-like sales fell by 3.9% due to poor performance in big ticket sales. Home Retail expects group benchmark profit before tax for the financial year to be £10m ahead of the current market consensus of £74m, with a year-end cash balance in excess of £300m."Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focussed on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition," said Terry Duddy, Chief Executive of Home Retail.Shares soared 12.02% to 137.20p at 9:00 Thursday following the release of the interim statement. RD