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The week ahead: Home Retail Group to reveal Q1 trading figures

Investors expect the digital makeover of Argos to show more progress when parent company Home Retail Group reports its first quarter trading on Thursday.

In recent years Argos has refreshed its store formats and beefed up its multi-channel offer. Analysts at Barclays said the chain’s “best in class” click and collect capability has transformed the large store portfolio into a competitive advantage.

Home Retail, led by chief executive John Walden, made the improvements because it said customers increasingly wanted local product collection and appreciate face-to-face customer service.

Apart from Argos, which has 734 stores, Home Retail also owns DIY chain Homebase, which operates 323 shops, and Barclays believes the pick up in the housing market will continue to support both businesses.

The bank said: “We believe that electricals will have another robust year while the housing market should continue to support sales of homewares and large ticket items at both Argos and Homebase.”

The market consensus is that Argos will announce a first-quarter rise in like-for-like sales of 3.7%, while Homebase is expected to boost like-for-like sales by 7.5% over the same period.

The group reported its first improvement in annual profits in six years in April, posting a 27% rise in profits to £115.4 million in the year to March 1.

The City expects the group to make profits of £129m in this financial year, based on its digital strategy and the improving housing market.

Source : Roger Baird - EADT

09 June 2014
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