Good weather helps boost Homebase sales, but Chief Executive plans ahead with caution.

Home Retail Group, which owns high street retailers Argos and Homebase, has announced encouraging results in its interim management statement for the 13 weeks from 1 March to 30 May 2009.

The UK’s leading home and general merchandise retailer said that both Homebase and Argos had enjoyed better than expected results, though with analysis, Homebase outperformed Argos with like-for-like sales.

Argos saw a drop in like-for-like sales of 2.8% for the quarter, with furniture and homeware markets continuing to underperform. However, taking into account new store openings, total sales at the company grew by 0.9%, to £937 million.

Homebase, on the other hand, reaped the benefits of a successful Easter, warm weather and outstanding results from its gardening and outdoor departments, with a like-for-like sales increase of 3.8% and total sales up by 5.8% to £465m. March and April, experienced particularly strong months, with May performing the weakest. Kitchen sales also contributed to the quarter’s results.

These results are in stark contrast to the 2008 annual results, which revealed a drop in like-for-like sales from Argos and Homebase of 6.2% and 10.2% respectively.

Terry Duddy, Chief Executive of the Group, said that the company will still need to remain vigilant during these unsettled times: “At this early stage of the financial year we continue to plan cautiously, with our trading focus remaining on driving cash gross margin and achieving further cost efficiencies.”