Video game sales boost Argos and Homebase owner

Argos owner Home Retail Group has reported an unexpected pick-up in sales in the last eight weeks of the year, due to buoyant video game sales and the earlier timing of Mother’s Day.

However, the group, which also owns Homebase, says a weakening outlook for consumer spending would limit growth in the year ahead. Home Retail, Britain’s Biggest household goods retailer, says like-for-like sales at its Argos stores rose 1.9% in the eight weeks to March 1, an improvement on the 0.2% decline posted in the 18 weeks to Jan 5.

Like-for-like sales at its Homebase outlets were down 5.3% in the eight weeks, compared with a 6.3% decline in the previous 18 weeks.

Home Retail’s financial year ended at the beginning of March and included “another year of double-digit earnings growth”, according to the company. It expects to deliver results in line with City forecasts on April 30.

Total sales for Argos reached £4.32bn, an increase of 3.8% on a year earlier, while Homebase was down 1.6% at £1.57bn.

“A further excellent performance in the video gaming category was the key driver of this, with a strong January sale and the earlier timing of Mother’s Day also being contributory factors,” Home Retail says. It says margins fell in the period as a result of the January sale and due to the types of products being sold.

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