Argos delivers 'good start to the year' as it posts 2% like-for-like rise in its first quarter

The general merchandise retailer, which posted its first like-for-like rise in five years in its last full-year update in May, said total sales for the 13 weeks to June 1 increased 1.2% to £828m.

Terry Duddy, chief executive of Home Retail Group, which owns Argos and Homebase, said Argos has “delivered a good start to the year” and trading had been consistent with expectations.

Consumer electricals sold well in the period, particularly across tablets and TVs and this combined with growth in white goods and core electricals “more than offset the market driven declines in the video gaming and audio categories as well as the weaker performance in seasonal products”, Argos said.

But gross margin declined 75 bps due to the impact of consumer electronics on the total sales mix.

In addition, Argos said its performance was boosted by online sales, which make up 42% of Argos’ total sales, up from 41% a year ago. Sales across its mobile site soared 114%.

DIY retailer Homebase also delivered like-for-like growth up 1.4% driven by sales of big ticket products. Total sales edged up 0.2% to £422m.

But sales of seasonal products, which represented 40% of total sales in the quarter, were hit by the volatile weather conditions. Sales for other categories were “broadly flat”. Dudy said its performance was “slightly behind” expectations.

Margins at Homebase declined 200bps as it increased promotional sales against that in the same period last year.