12th Sep 2013 09:20
LONDON (Alliance News) - Home Retail Group PLC Thursday said that it saw continued sales growth in internet and mobile commerce sales, with Argos sales up 2.7% in the second quarter and Homebase trading well through its peak summer period.
The home- and general-merchandise retailer said that it expects to deliver its full-year group benchmark profit in line with current market expectations, but said that the outcome will depend on Argos' peak Christmas trading period.
In the group's second-quarter trading statement, covering the 13 weeks to August 31, Argos sales rose to GBP889 million, boosted by strong sales in seasonal products due to better weather in the UK, and continued growth in electricals, which it said more than offset sales declines in furniture and homewares.
Home Retail said that Argos sales were up 1.8% to GBP1.72 billion in the first six months of the year, and on a like-for-like basis, up 2.3%, although it said that net closed space reduced sales by 0.3% in the second quarter with the store portfolio remaining at 737.
The group said that Argos online sales continued to grow as the company further develops the Argos mobile and tablet apps. Home Retail said mobile commerce sales grew by 133% to reach 17% of total Argos sales, up from 7% for the same period last year.
The company said that Argos's gross margin declined by 50 basis points in the second quarter, driven by the sales mix impact from the growth in electricals.
Home Retail said that Homebase revenue rose by 9.3% to GBP400 million in the second quarter, and 11% on a like-for-like basis, largely due to strong sales of seasonal products. However, it said that net closed space reduced sales by 1.7% in the quarter, as three store closures reduced its store portfolio to 333.
First-half revenues for Homebase rose 4.4% to GBP822 million.
The company said that big ticket sales performance was slightly ahead, while sales in the remaining categories were slightly down.
"Whilst we continue to expect consumer spending to remain subdued, we approach the important Christmas trading period in good operational shape. We are on track to deliver the investment plans which will drive the long term development of both businesses," said Chief Executive Terry Duddy in the statement.
Home Retail Group will announce its half-year results on October 23.
Its shares were up 3.1% or 5.10 pence Thursday morning, trading at 169.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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