Jan 13, 2011
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Home Retail Q3 sales fall, beat analyst view

Jan 13, 2011

Jan 13 - Home Retail, Britain's No. 1 household goods retailer, said sales had fallen less than analysts expected at both its Argos and Homebase units in the run-up to Christmas, and forecast yearly profit in line with its own previous forecast.

Argos, part of the Home Retail Group

The company said on Thursday it expected full-year pretax profit to be around the mid-point of its previously indicated range of 250 million pounds ($391.7 million) to 275 million.

Sales at Argos stores open more than a year fell 4.9 percent in the 18 weeks to Jan. 1, which includes its fiscal third quarter, compared with an expected 5.7 percent decline, according to a company poll of 17 banks and brokerages.

Sales had dropped 5 percent in the second quarter.

Homebase like-for-like sales fell 1.2 percent, compared with an expected fall of 2.0 percent and with flat second-quarter sales.

Argos gross margin fell 25 basis points on increased clearance activity, while reduced promotional activity helped boost Homebase gross margin by 75 basis points.

Shares in Home Retail, which last September lost its place in Britain's FTSE 100 index of leading companies, have lost 29 percent of their value over the last year, as cash-strapped low-income shoppers trimmed spending.

The stock closed on Wednesday at 206 pence, valuing the business at 1.66 billion pounds.

(Reporting by James Davey and Sarah Young; Editing by David Holmes)

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