Proactiveinvestors recommends
Additional Information
Market: LSE
Sector: General Retailers
EPIC: HOME
Latest Price: 132.00p  (-0.60% Descending)
52-week High: 165.20p
52-week Low: 68.45p
Market Cap: 1,073.75M
1 year chart More charts
digital-look imported chart image
Deal HOME Tax Free*
*subject to change and depends on individual circumstances.
1 day chart More charts
digital-look imported chart image
Advertisement
Watchlist/Portfolio

Add to watchlist:

Only registered members can add into watchlist !

Register here !
Home Retail Group
www.homeretailgroup.com
Deal Home Retail Group Tax Free* Losses can exceed
your initial deposit *subject to change and depends on individual circumstances.
Home Retail Group is a home and general merchandise retailer with sales of £5.9 billion in the last financial year. The company sells products under two distinctive and complementary brands – Argos and Homebase - in the UK.
Full Home Retail Group profile here
Pdf

Home Retail Group falls as Argos sales disappoint

January 12 2012, 9:03am Broker Seymour Pierce has decided to downgrade the stock from “hold” to “sell” in response to the statement, while also cutting its target price from 115 pence to 75 pence

Home Retail Group (LON:HOME) has decided to significantly reduce its full year dividend after sales at both its businesses dropped during the crucial Christmas period.

In a trading update covering the 18 weeks to December 31, Home Retail reported that Argos sales slipped 7.8 percent to £1.72 billion, while sales at the Homebase home improvement store chain were down 2.5 percent at £475 million.

The decline in Argos sales was blamed on weakness in the consumer electronics market, particularly in video gaming and audio, which was in part offset by strong demand for laptops and tablets.

On the positive side, the share of online sales at Argos rose from 38 percent a year earlier to 41 percent, in part helped by the fast developing area of mobile commerce, said Home Retail.

At Homebase, sales of big ticket items were down, while all other product categories saw no change from 2010.

Despite the decline in sales, Home Retail said it expects its pre-tax profits for the full year to be in the middle of the projected range between £78 million and £125 million.

“We will continue to plan cautiously with an ongoing focus on managing robustly both the cost base and the cash position of the group while prioritising our investment in the ongoing development of our multi-channel capabilities,” said chief executive of Home Retail Group Terry Duddy.

Broker Seymour Pierce has decided to downgrade the stock from “hold” to “sell” in response to the statement, while also cutting its target price from 115 pence to 75 pence.

Seymour Pierce analyst Freddie George is concerned that Argos will continue to be impacted by the challenging economic environment, while also facing pressure from increasing market competition, particularly from the food retailers.

The update disappointed investors as shares in Home Retail dropped 4 percent to trade at 83.6 pence this morning, valuing the group at £680 million.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.