Argos and parent company Home Retail Group have said they expect annual profits to be at the lower end of forecasts due to a poor Christmas trading period.
Argos said like-for-like sales were down 2.2% in the 18 weeks to 2 January. As a result, Home Retail Group expects profits to be towards the bottom of its £92-100 million forecast range.
Last week, Sainsbury's, which didn't have the happiest of Christmases either, revealed that Home Retail Group rejected its takeover approach in November. Sainsbury's has since suggested that it could close 200 Argos stores and relocate them in its supermarkets, if it were to takeover Home Retail Group. Instead, HRG has now said it is in talks to sell Homebase to Wesfarmers for around £340m.
In comparison to Argos' struggles over Christmas, Homebase actually reported a 5% increase in like-for-like sales, although that was below analysts' forecasts.
Argos said the period contained its strongest ever day of sales - on Black Friday. The retailer said sales were up 41%, with online sales rising 45% and accounting for 62% of all sales over the Black Friday weekend.
Home Retail Group chief executive John Walden said: "I continue to believe that the capabilities being develop in the Argos transformation plan will position Argos as a retail leader in an increasingly digital future."
