Homebase promotionally stable
Published: 11 September, 2009
WALLINGTON: The Home Retail Group, owners of Homebase and Argos today updates on the trading of its second financial quarter and the first half overall.
Total sales at Homebase grew by 2.9% with two new stores contributing 1.3% of that.
Like-for-like sales increased by 1.6% in the quarter, stimulated by successful promotions and the clearance of over-wintered stock. Growth was led by big ticket categories, particularly kitchens. After some excellent weather in the first quarter, conditions were more mixed in the latest period, resulting in a marginal decrease in seasonally-related sales. For the remaining categories overall, sales were broadly flat.
Due to the promotional push, however, gross margins marginally declined.
Chief executive Terry Duddy commented: "We are pleased that both Argos and Homebase performed well, delivering cash margin ahead of our expectations. Combined with exceptionally good cost management, this means we now expect Group benchmark profit before tax for the first half to be broadly in line with last year's £121m.
"We approach the key Christmas trading period from a position of operational and financial strength, but continue to plan cautiously for consumer demand. We will also have a more significant impact from adverse currency movements in the second half of the year."