Homebase sales flat
Published: 11 March, 2011
UK: MILTON KEYNES: A profit warning from Home Retail Group, the company behind Argos and Homebase, and a bleak forecast for the next two years, confirming reports of a slowing DIY market.
Like-for-like sales at Homebase were better than expected, up 3.8%, compared with a fall of 1.2% in the 18 weeks to 1 January.
Home Retail Group's chief executive Terry Duddy said: "There are clear signs of further pressures on consumer spending, with recent trading conditions, particularly at Argos, proving to be more difficult and volatile than we anticipated." Like-for-like sales at Argos dropped 4.6% in the eight weeks to 26 February, worse than City forecasts of a 1.3% fall, and compared with a 4.9% decline in the 18 weeks to 1 January.
Gross margin was up 300 basis points at Homebase but fell 150 basis points at Argos.
Home Retail expects a low-to-mid-digit percentage sales decline at Argos and a broadly flat performance at Homebase. Costs will also be higher, year on year, in both businesses.