Home Retail Group, owner of the Argos and Homebase stores, has reported poor Christmas sales growth, but it said tight cost controls would help profits come in at the top end of expectations.
Like-for-like sales rose 0.2% at Argos in the 14 weeks to January 6, but fell 2.9% at Homebase. Electrical goods sold strongly, driven by televisions and video games. Jewellery, which is usually a big seller at Christmas, was weak.
Analysts had been forecasting a group underlying pre-tax profit of around £336-363m in the year to March 2007.
Argos, one of Britain's biggest Internet retailers, increased online sales by 37% in the third quarter. The internet now provides 19% of Argos's overall sales. Argos also opened eight new stores, bringing the total to 681 and boosting overall sales by 4.3%.
Homebase opened two new stores, bringing the total to 307 and offsetting most of the decline in like-for-like sales.
