Sales at Argos rose 4.5 per cent to£893 million in the 13 weeks to June 2. A like-for-like increase of 0.9 per cent was driven by further strong growth in flatscreen TVs and video games systems, with seasonal categories also reporting good performances. The group said it anticipates an even greater level of investment in lower prices, which will effect margins for the full year.
Online orders rocketed 29 per cent and represented 18 per cent of total sales, about half of which were reserved for store collection. Home delivery orders also rose to represent 25 per cent of total sales.
At Homebase, sales jumped 5.2 per cent to£463 million, with like-for-likes also up 2.7 per cent. The group opened two stores and closed one during the period, taking the total to 311. Performance in the earlier part of the period was driven by the benefit of warm weather on seasonal categories, but trading became more difficult during the latter weeks of the period.
Home Retail Group chief executive Terry Duddy said: 'Homebase has seen good sales growth in its peak season to date, while Argos achieved like-for-like sales growth against a highly successful period last year. Gains in gross margin were achieved in the quarter, with both businesses benefiting from good sourcing. We remain cautious given the uncertain consumer outlook and our expectations for the full year are unchanged at this early stage.'
Pali international analyst Nick Bubb said: 'The overall outcome is ok, but the shares still look rather expensive compared to their peers.'