UPDATE 1-Sunshine boosts sales at Home Retail's Homebase
(Adds CEO comments, shares)
By Paul Sandle
LONDON, Sept 12 (Reuters) - Britain's Home Retail Group Plc said summer sunshine had delivered a big boost to sales at its home improvements chain Homebase in the second quarter and helped shift seasonal products at its biggest business Argos.
Shares in Home Retail, which have risen 29 percent since the start of the year, hit to a two-year high of 178 pence and were trading up 3.2 percent at 169 pence by 0819 GMT, topping the FTSE mid-cap index.
Like-for-like sales at Homebase rose by 11 percent in the 13 weeks to Aug. 31, it said, comfortably beating analyst expectations of 3.3 percent, while sales at Argos on the same measure were up 2.7 percent, beating forecasts of 2.0 percent.
Chief Executive Terry Duddy, who recently said he would quit by next July, said Homebase had had a "fantastic summer" with the highest like-for-like sales growth in at least a decade.
Sales of garden furniture at Homebase rose by 60 percent and barbecues were up 56 percent, he told reporters on Thursday.
Seasonal goods such as paddling pools were also in demand at Argos, helping offset declines in furniture and homeware.
"We sold more desk fans in two weeks than in the whole of 2012," Duddy said.
The strong summer performance meant the group was more confident in saying it would meet analysts' profit expectations for the full year, he said, but the outcome still depended on the important Christmas trading performance at Argos.
Analysts on average expect yearly pretax profit of 98.6 million pounds ($155.9 million), according to Thomson Reuters data.
"Whilst we do not believe that our customers are better off, there was clearly a feel-good factor in the summer when they were spending on outdoor leisure products," he said.
The comments contrast with remarks from Kingfisher, Europe's biggest home improvements retailer, which reported a slight dip in profit on Wednesday and said it was too early to call an economic recovery in Britain. ($1 = 0.6324 British pounds) (Editing by Sarah Young and David Holmes)
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