Argos hit by weaker than expected consumer electronics sales
High-street trading conditions have been more difficult and volatile than expected according to Home Retail (LON:HOME) chief executive Terry Duddy.
In a first quarter trading statement, covering the 13 weeks since 27 February 2011, Duddy revealed that total sales dropped 8.1 percent at Argos, to £817 million. On a like-for-like basis sales were down 9.6 percent.
The shortfall was largely down to weakness in the consumer electronics market. The company said that the market was significantly worse than it anticipated, but it believes it held its market share in consumer electronics – based on figures for March and April.
Speaking about the Argos brand Duddy said: "The consumer electronics market represents a substantial proportion of its sales and has experienced a further significant decline. The difficulty of this market, together with the volatility of overall sales, has made the balance of the year more difficult to predict.”
Meanwhile trading has been better across the Homebase branded stores. "At Homebase, the quarter represented a good outcome to its peak trading period reflecting the favourable weather, together with the strong execution of its seasonal offer,” Duddy said.
The group pointed out that total sales were in-line with last year at £458 million. Furthermore like-for-like sales increased by 1.6 percent, which has seen a further gain in market share. Seasonal sales – for product like garden furniture, plants and exterior decorating - have been strong, it said.
The chief executive added: "While we remain cautious for the balance of the financial year, we are focused on our operational performance while continuing to invest across the businesses."
http://www.proactiveinvestors.co.uk/companies/news/29192/home-retail-argos-hit-by-weaker-than-expected-consumer-electronics-sales-29192.html