The Home Retail group said it expected to post full-year profit before tax in line with expectations.

This is despite the fact that underlying growth at its Argos and Homebase chains over the Christmas period missing forecasts. 

Britain's biggest household goods retailer said it had taken a different approach to Christmas trading this year, after the adoption of the Black Friday promotional day at the end of November skewed normal shopping patterns. 

With Argos sales up 45% on Black Friday, the group then sought to protect its profitability by not chasing sales with further discounts in the run up to Christmas. 

As a result, sales from Argos stores open over a year were up 0.1% in the 18 weeks to January 3, well below the 2% growth that had been expected by analysts. 

At Homebase, like-for-like sales were up 0.6%, and again well below the 4.1% that had been forecast by analysts. 

"In anticipation of volatility in trading patterns and the profit pressure caused by aggressive promotions, Argos pursued a more cautious trading stance over the period," Home Retail's chief executive John Walden said.

"This resulted in broadly flat like-for-like sales, but achieved both improved gross margins and good cost management," he added.