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| Version 2 | Version 3 |
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| Argos and Homebase owner warns on profits | Argos and Homebase owner warns on profits |
| (35 minutes later) | |
| The owner of Argos and Homebase, Home Retail Group, has warned that its full-year underlying profits are set to fall below market expectations. | The owner of Argos and Homebase, Home Retail Group, has warned that its full-year underlying profits are set to fall below market expectations. |
| Uncertainty over Black Friday trading, investment in online ordering, and a "challenging" first half could mean underlying full-year profit before tax is below £115m, Home Retail Group said. | Uncertainty over Black Friday trading, investment in online ordering, and a "challenging" first half could mean underlying full-year profit before tax is below £115m, Home Retail Group said. |
| In the half year to 29 August, group sales fell 2% to £2.6bn. | In the half year to 29 August, group sales fell 2% to £2.6bn. |
| But underlying profit before tax increased by 10% to £34.1m. | But underlying profit before tax increased by 10% to £34.1m. |
| Home Retail Group chief executive John Walden said: "While group benchmark profit before tax increased slightly during the first half, performance overall was mixed." | Home Retail Group chief executive John Walden said: "While group benchmark profit before tax increased slightly during the first half, performance overall was mixed." |
| And he added: "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." | And he added: "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." |
| Home Retail Group shares dived almost 14% in early trading in reaction to the warning. | Home Retail Group shares dived almost 14% in early trading in reaction to the warning. |
| Spending shift | Spending shift |
| Mr Walden reiterated that trading at Argos over the key Christmas period was likely to be "less predictable than usual" due to the impact of Black Friday shopping deals. | Mr Walden reiterated that trading at Argos over the key Christmas period was likely to be "less predictable than usual" due to the impact of Black Friday shopping deals. |
| Originating in the US, Black Friday is becoming a major day for UK retailers. Last year, police were called in a number of UK cities amid frenzied buying from shoppers. | Originating in the US, Black Friday is becoming a major day for UK retailers. Last year, police were called in a number of UK cities amid frenzied buying from shoppers. |
| Analysts said Black Friday offers caused a shift in spending patterns in the final quarter of last year, which may have had a negative impact on Christmas shopping. | Analysts said Black Friday offers caused a shift in spending patterns in the final quarter of last year, which may have had a negative impact on Christmas shopping. |
| Mr Walden said Home Retail Group had increased investment in "Fast Track", Argos' online ordering, delivery, and click-and-collect service. | Mr Walden said Home Retail Group had increased investment in "Fast Track", Argos' online ordering, delivery, and click-and-collect service. |
| The service, which was announced last week, offers a same-day delivery service across the UK, seven days a week. | The service, which was announced last week, offers a same-day delivery service across the UK, seven days a week. |
| Home Retail Group is in the process of trying to transform Argos from a catalogue-based retailer into a more digital business. | Home Retail Group is in the process of trying to transform Argos from a catalogue-based retailer into a more digital business. |
| However, Mr Walden said that Argos had a "challenging first half", with like-for-like sales down 3.4%. The chain suffered from weak sales of TVs and tablet computers. | However, Mr Walden said that Argos had a "challenging first half", with like-for-like sales down 3.4%. The chain suffered from weak sales of TVs and tablet computers. |
| But Homebase like-for-like sales rose 5.6%, with Hygena kitchens, Ideal Standards bathrooms and Habitat furniture sales growing. |