Home Retail Group, which owns Argos and Homebase, has reported strong results despite earlier fears that the wettest April in 100 years would significantly dampen sales.
During the 13-week trading period ended 2 June, Argos ratcheted up total sales of £819m, down 0.2 per cent on a like-for-like basis. Investors viewed the figure's relative steadiness as a cause for celebration: after all, the City had predicted a drop of 4 per cent. Shares rose 17 per cent on the news.
Homebase's sales, meanwhile, fell more than 8 per cent to £421m.
Two Argos stores closed in the quarter, reducing the store portfolio to 746; Homebase's portfolio is unchanged at 341.
At Argos, consumer electronics saw an improved performance, driven by growth in laptops and tablets, which offset declines in the TV, audio and video-game categories.
Sales via the online check-and-reserve service grew 24 per cent and represented 29 per cent of total Argos sales. Total internet sales grew 17 per cent, now making up 41 per cent of the total. Multi-channel sales represented 51 per cent of Argos sales, up from 46 per cent a year earlier.
Like-for-like sales at Homebase, which represent about 40 per cent of total sales, were down by around 15 per cent, largely due to the impact of poor weather conditions.
Homebase's gross margin improved by approximately 225 basis points, while that of Argos declined by 25 basis points.
Terry Duddy, chief executive of Home Retail Group, said:
Over a particularly volatile trading period, Argos had a solid start to the year supported by its multi-channel performance, while at Homebase the poor weather conditions adversely impacted seasonal product sales. At this early stage of the financial year we are comfortable with current market expectations for full year benchmark profit.
We will continue to plan cautiously, managing robustly both the cost base and the cash position of the group while prioritising our investment in the ongoing development of our multi-channel capabilities.