TOM GADSBY | MATRIX GROUP
These are pretty dire figures. We expected another tricky quarter for Argos, but the like-for-like sales fall is well below the expected range. While the decline in profits over the past two years is cyclical rather than structural, a clear upturn in consumer demand would be needed for the shares to pick up.
DAVID JEARY | INVESTEC
This was an all-round disappointing trading update, likely to drive up to a 20 per cent cut to current 2012 full-year pre-tax profit forecasts. Pressure on profit will come from Argos, especially with the cost base likely to increase by around £30m over the year. It will also raise questions on the dividend.
MARK PHOTIADES | SINGER CAPITAL
This is in line with forecasts in the smaller Homebase division but significantly below expectations in the Argos division. We would expect downgrades of circa five to ten per cent to current full-year pre-tax profit estimates. We remain cautious on earnings prospects given its exposure to the UK customer.