1 July 2020 – Q1 trading statement

The group has issued a positive trading statement covering the 16 weeks to 27 June which revealed grocery sales up 10.5% and sales of general merchandise up 7.1%.  Sales at Argos were 10.7% higher.  Given the effect of the lockdown it is little surprise to note that digital sales at the group more than doubled.  Although the profit impact of Covid-19 is likely to exceed £500m this year, this has been broadly offset by business rates relief and stronger grocery sales.  The group remains financially strong and given the relatively defensive nature of the business the shares do not look expensive.  They remain a BUY.