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Home Retail Group Q3 IMS

Home Retail Group, the UK’s leading home and general merchandise retailer, today publishes an Interim Management Statement for the 18 weeks from 1 September 2013 to 4 January 2014.

Terry Duddy, Chief Executive of Home Retail Group, commented:

“We are pleased that both Argos and Homebase have delivered another period of good trading performance despite a challenging consumer environment. In its peak trading period Argos has continued to grow internet sales, which now represent nearly half of total Argos sales. This growth was supported by a strong performance in mobile commerce sales which represented 20% of total Argos sales in the period. This gives further reinforcement to our plan for Argos to become a digital retail leader.

“As a result of the trading performance, we now expect to achieve full year Group benchmark profits towards the top end of the current range of market expectations of £90m to £109m. We remain on track to deliver the investment plans in both businesses.”

Total sales at Argos grew by 3.6% to £1,808m. Net closed space reduced sales by 0.2% as a result of store closures in previous periods. In the current period a net one new store opened, taking the portfolio to 738.

Like-for-like sales increased by 3.8% in the period. Electrical products delivered a strong sales performance principally as a result of growth in video gaming, tablets, televisions and white goods, partially offset by the continued declines in audio and photographic sales. The growth in electrical products was partially offset by declines in the homewares and jewellery categories.

Internet sales grew to represent 46% of total Argos sales, up from 42% for the same period last year. This performance was supported by growth in both Check & Reserve and also mobile commerce sales. Mobile commerce sales grew by 75% against the same period last year to represent 20% of total Argos sales in the period, up from 12% in the prior year.

The approximate 50 basis point gross margin decline was driven principally by the sales mix impact from the growth in electrical products, partially offset by a reduction in the level of stock clearance activity.

Total sales at Homebase grew by 2.3% to £464m. Net closed space reduced sales by 2.4% in the period; 10 stores closed in the period reducing the store portfolio to 323.

Like-for-like sales increased by 4.7% in the period, driven principally by growth in big ticket sales. Sales in the remaining categories were slightly up year on year.

The approximate 75 basis point gross margin decline was driven principally by the sales mix impact from the growth in big ticket products.

For the full trading update, visit our Industry Articles pages:

Source : Home Retail Group

16 January 2014
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