14th Jan 2016 07:29
LONDON (Alliance News) - Home Retail Group PLC on Thursday said its pretax profit for the year to the end of February will be at the lower end of market expectations as it posted a mixed trading performance for its Argos catalogue retail business but a rise in like-for-like sales at Homebase, its DIY and garden centre retail arm that has been put up for sale.
The company said its pretax profit for the year will be at the lower end of market expectations of GBP92.0 million to GBP118.0 million. This would be down from GBP132.1 million a year earlier.
The FTSE 250-listed company said total sales for Argos in the 18 weeks to January 2 rose 0.9%, though like-for-like sales fell 2.2%, with the group's new digital concession locations the main contributor to the sales growth.
Home Retail said trading patterns for Argos were affected by the Black Friday promotion, a shift in consumer demand around that event and reduced footfall at high street stores.
For Homebase, Home Retail said total sales fell 4.0%, even as like-for-like sales grew 5.0%, as the restructuring of its store base, including the closure of underperforming stores and a focus on a smaller overall portfolio, paid dividends.
Late on Wednesday, Home Retail had said it had entered talks with Australian retailer Wesfarmers Ltd to sell the Homebase business for GBP340.0 million, a deal which could pave the way for J Sainsbury PLC, the FTSE 100 supermarket, to acquire Argos. Sainsbury's made a bid for Home Retail, which was rejected, in November, but has made clear Argos is the main target of its interest.
By Sam Unsted; [email protected]; @SamUAtAlliance
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