The owner of the Argos chain has said its profits hopes remain intact after strong demand for laptops and toys helped it overcome “some particularly challenging and volatile” conditions in the run-up to Christmas.
Home Retail Group, which also owns DIY retailer Homebase, said Argos racked up sales of £1.86 billion in the 18 weeks to January 1, a fall of 3.2% and down 4.9% on a like-for-like basis on the same period a year earlier.
However, this same-store figure was better than the rate of 6. 5% reported in October and chief executive Terry Duddy said the high street chain had performed in line with original expectations for the festive period.
He added that profits for the year to February were set to be around the mid-point of its previously guided range of £250 million to £275 million.
Total sales at Homebase, which is less focused on Christmas demand, declined by 2.8% to £487 million, while like-for-like sales dropped by 1.2% even though sales of big-ticket items benefited from business ahead of January’s VAT rise.
The toughest market for Argos was in video gaming, while television sales were also down against a strong performance last year.
The jewellery category was also weak but Argos saw an “excellent” performance in laptops and tablet computers, as well as further growth in white goods and toys.
The internet represented more than £700 million or 38% of Argos sales, up from 35% a year earlier, as more shoppers took advantage of online reservations and the Argos application for Apple iPhone devices.
Investec Securities said the third quarter update was better than feared and implied a 4% upgrade in its profit forecast for the year.
Argos operates from 754 stores, while Homebase has 341 locations after reducing the portfolio by four outlets in the quarter.