HRG warns it will miss profit targets
Argos and Homebase parent Home Retail Group has warned that it will miss profit expectations for the current year.
The group says a drop in sales at Argos in the first half, uncertainty over Black Friday and investment in its Fast Track delivery and collection service means it will miss profit targets.
‘Trading at Argos during this year’s important Christmas season seems less predictable than usual, as both retailers and customers determine whether to repeat last year’s unusual Black Friday patterns. The combination of this trading uncertainty, an increased level of investment in the launch of Fast Track and the underlying profit reduction from Argos’ challenging first half, mean that at this stage of the financial year we expect the group’s full-year benchmark profit before tax to be slightly below the bottom end of the current range of market expectations of £115m to £140m,’ says John Walden, HRG chief executive
Like for like sales at Argos dropped by 3.4% in the 26 weeks to 29 August, with operating margin dropping from 0.7% to 0.4% resulting in operating profit dropping from £12m to 6.4%.