Like-for-like sales declined by 5 per cent and total sales dropped by 1 per cent for the three months to June 30. The core decorating and DIY ranges remained weak, but kitchen and furniture ranges showed strong growth. The group said gross margins had improved on the last year after a reduction in promotional activity.
Homebase opened 3 new stores in the quarter, bringing its total to 300.
At Argos, sales were up 14 per cent and like-for-likes up 7 per cent, following what the group described as a stronger than expected performance of the non-food/non-clothing market in the UK.
Consumer electronics performed particularly well, with the World Cup driving sales of flatpanel televisions and set-top boxes.
Strong sales were 'substantially offset by a related reduction in gross margin compared to the previous year', as a result of increased promotional activity and a change in product mix.
Sales at Argos Direct were up 10 per cent. Within that internet orders rose 46 per cent. The delivery to home operation accounted for 25 per cent of Argos' revenue.
Argos trades from 663 stores, with six additional branches opened during the quarter.
The group plans to demerge its retail arm from its credit checking business Experian. It said both companies were 'in good shape' to separate.