Argos warns profits could be lower than expected
Home Retail Group, the parent company of Argos, has warned that full-year profits could be lower than expected, as a result of “trading uncertainty”, a “challenging first half” and the investment that has been made in launching the new Fast Track same-day home delivery and store collection services. In a statement issued today (21 October), Home Retail Group announced that its sales for the half-year up to 29 August 2015 were down 2% to £2,629m. Benchmark profit before tax for the group increased by £3.2m or 10% to £34.1m: Homebase increased by £6.5m, but Argos decreased by £5.6m.
John Walden, the Chief Executive of Home Retail Group, commented: “Argos is investing significantly in the launch of Fast Track and although the rate of customer take-up cannot be certain, we are confident that customers will increasingly embrace this market leading service over time.
“We look forward to an improved sales performance for both Argos and the Group in the second half.”
However, Walden added: “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.”