Home Retail reports good start to year

12th Jun 2014 07:17

Argos and Homebase owner Home Retail reported a good start to the year and said it was on track to hit full-year targets, but cautioned that it faced a challenge to match a strong second quarter last year.Home Retail said strong sales of seasonal products due to better weather had helped Argos and Homebase to increase like-for-like sales in the 13 weeks from March 2nd to May 31st.It said Argos had also done well with sales of electrical goods, while Homebase boosted sales of big ticket items.Chief Executive John Walden said the group was pleased with the performance, but was mindful that it faced a more difficult task during the rest of the year to match a good performance in both businesses last year, including a very strong seasonal performance from Homebase in the second quarter of 2013/2014."At this early stage of the financial year, we expect to achieve full year group benchmark profit in line with current market expectations," he said.Argos increased like-for-like sales in the period by 4.9% to £868m and Homebase sales were up 7.9% to £445m. Argos sales rose largely as a result of growth in video gaming and TVs, partially offset by a market driven decline in tablets, but gross margin fell by 25 basis points mainly due to an adverse sales mix impact from the growth in margin-dilutive electrical products.Likewise at Homebase, a decline of about 50 basis points in gross margin was principally driven by adverse sales mix impact from the growth in margin-dilutive seasonal and big ticket products. PW