Argos sales decline in Q2 2015

GUS To De-merge Argos And Experian

Home Retail Group released its second financial quarter results covering the 13 weeks ending August 29 2015, citing a 0.4% sales decline across Argos stores.

Total sales at Argos declined by 0.4% to £897 million. Net new space contributed 2.4% with the store portfolio increasing by 52 stores to 840. This increase comprised 44 digital concessions within Homebase and eight digital concessions within Sainsbury’s.

Like-for-like sales declined by 2.8% in the quarter. Sales of electrical products continued to decline.

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Internet sales for the quarter represented 46% of total Argos sales, up from 44% for the same period last year. Within this, mobile commerce sales grew by 11% to represent 25% of total Argos sales, up from 22% in the prior year.

The approximate 125 basis point gross margin improvement was principally driven by the anticipated impact of favourable currency and shipping costs, together with the continued timing benefit of a small number of other positive items which are expected to reverse in the second half of the current financial year. These increases were partially offset by an increased level of promotional sales.

John Walden, Chief Executive of Home Retail Group, comments: “Argos delivered an improved sales performance in the second quarter. It made good progress with new stores, opening more than 50 digital concessions within Homebase and Sainsbury’s, which have generated encouraging early results. Consistent with our previous guidance, Argos’ sales continued to be adversely impacted by the performance of a number of key electrical product categories as well as weaker overall market conditions in August.

“The outcome for the Group’s full-year generally depends upon the important Christmas trading period at Argos which, this year, seems less predictable than usual due to a less certain promotional environment. Our teams have made solid progress preparing for this period, including substantially completing the technology and operational steps necessary to introduce new store collection and home delivery propositions to our customers. We will be making increased marketing and promotional investments to launch these propositions and we expect customers to increasingly embrace them over time.”



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