Home Retail Group revealed its financial results today, with multi-channel retailer Argos doing well over Christmas.
Tablets were singled out as a key factor, as total sales grew by 1.6 per cent.
Terry Duddy, Chief Executive of Home Retail Group, commented: “Argos had a good peak trading period building on its first half performance. Internet sales for the year to date now represent 42% of Argos’ total sales, within which mobile commerce sales grew by 125% as our customers took advantage of new tablet and smartphone apps and improved website functionality.
“As a result of good operational management and cash generation over the peak trading period, we now expect Group benchmark profit before tax for this financial year to be about £10m ahead of the current market consensus of £73m and the year end cash balance to be in excess of £300m. Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focussed on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition.”
While Argos closed some stores last year, many viewed the decision as a sensible way to cut costs and build on other areas of the business.
It looks as if the firm has been proved right for now. Here are some key points from the results:
- Total sales at Argos grew by 1.6% to £1,744m. Net closed space reduced sales by 1.1% in the period with the store portfolio remaining at 739.
- Like-for-like sales increased by 2.7% in the period. Consumer electronics continued to deliver an improved sales performance driven by strong growth in tablets, which together with further growth in white goods, toys and core electricals, offset weaker trading in the homewares and jewellery categories.
- The approximate 50 basis point gross margin decline was principally driven by the sales mix impact from the improved performance in consumer electronics and price investment, partially offset by the anticipated net benefit of favourable currency and reduced shipping costs.
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