Argos owner Home Retail Group warns of falling profits

Home Retail Group said economic conditions remained "challenging"

Sales at Argos have continued to fall, its owner has said, as consumers worry about the economy and spend less money.

Home Retail Group, which owns Argos and DIY chain Homebase, said it expected its profits in the six months to 28 August to be down by 20-25%.

Like-for-like sales at Argos, which strip out the impact of store openings and closures, fell 6.5 per cent in the six month period.

Half-year like-for-like sales at Homebase were down 0.8%.

For the financial year as a whole, Home Retail Group expects to make underlying pre-tax profits of £250-275m, which is at the bottom end of analysts' forecasts.

"As always, the outcome will depend upon trading at Argos in its peak Christmas period," said Home Retail Group chief executive Terry Duddy.

Home Retail Group said video gaming and large ticket household goods such as furniture were the most challenging areas, but sales of computers, toys and smaller homeware goods did much better.