Shares in Home Retail plunged roughly 15 per cent after the group - which operates Argos and DIY chain, Homebase - issued a trading update revealing further poor trading. We think things are unlikely to get better soon, and reiterate our sell advice.
Argos' like-for-like sales fell 9.6 per cent in the 13 weeks to end-May, fuelled by a collapse in demand for consumer electronics products, and the unit's gross margin dropped 75 basis points too. Homebase's gross margin also declined, down 50 basis points, although like-for-like sales did rise 1.6 per cent. "Trading conditions, particularly at Argos, have proved to be more difficult and volatile than anticipated," said chief executive Terry Duddy.
When: 30 September 2010
Price: 208p
Tip performance: +17%
