Home Retail Sales Fall; Outlook Uncertain

10th Jun 2010 07:17

By Simon Zekaria Of DOW JONES NEWSWIRES LONDON (Dow Jones)--General merchandise retailer Home Retail Group PLC (HOME.LN) Thursday posted falling first-quarter same-store sales, warned the economy remains uncertain and reiterated that it targets similar profitability this fiscal year to last. "Economic conditions remain both challenging and uncertain, with this quarter proving difficult in terms of consumers' willingness to spend," Chief Executive Terry Duddy said in a statement. Duddy also said: "At this early stage of the financial year, we are targeting to achieve a similar level of profitability to last year." In the last fiscal year, the group's pretax profit before exceptionals came in GBP292.9 million. In the first quarter to May 29, home improvement chain Homebase posted a 1.4% annual fall in sales for stores open at least a year. The chain's gross margin fell around 150 basis points. General merchandise chain Argos reported a 8.1% fall in same-store sales. Argos' gross margin also fell around 150 basis points. Earlier this month, Homebase rival B&Q, owned by Kingfisher PLC (KGF.LN), reported a 2.8% fall in same-store sales as cold weather impacted seasonal and outdoor product purchases. At the end of April, Home Retail warned the U.K. retail sector is set to remain difficult after it posted an 11% fall in pre-tax profit for its last fiscal year. The retailer has been hard hit by the economic downturn in the U.K. over the past two years, which has crimped consumer spending. Many economists expect the upturn to be slow and fragile as the coalition government will be forced to cut public spending and impose taxes to cut the budget deficit. On Wednesday, Homebase shares closed at 238 pence, valuing the company at GBP2.09 billion. By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; [email protected] (END) Dow Jones Newswires June 10, 2010 02:17 ET (06:17 GMT)