Summer sales boost for Homebase and Argos

Britain’s Home Retail Group said yesterday that summer sunshine had delivered a big boost to sales at its home improvements chain Homebase in the second quarter and helped shift seasonal products at its biggest business, Argos.

Shares in Home Retail, which have risen 29% since the start of the year, hit a two-year high of 178p, (211c) topping the FTSE mid-cap index. Like-for-like sales at Homebase rose by 11% in the 13 weeks to Aug 31, it said, comfortably beating analyst expectations of 3.3%. Sales at Argos on the same measure were up 2.7%, beating forecasts of 2%.

CEO Terry Duddy, who recently said he would quit by next July, said Homebase had a “fantastic summer” with the highest like-for- like sales growth in at least a decade. Sales of garden furniture rose by 60% and barbecues were up 56%.

Seasonal goods such as paddling pools were also in demand at Argos, helping offset declines in furniture and homeware. “We sold more desk fans in two weeks than in the whole of 2012,” Mr Duddy said.

The strong performance meant the group was more confident in saying it would meet analysts’ profit expectations for the full year, he said, but the outcome still depended on the important Christmas trading performance at Argos.

Analysts on average expect yearly pre-tax profit of £98.6m, according to Reuters data.