Home Retail Group said full-year profits would be towards the upper end of forecasts but that sales growth in the short term would be hard to achieve.
The Argos owner said today that sales at its catalogue-based stores slipped 0.2 per cent in the 18 weeks to January 5th while same-store sales at its Homebase do-it-yourself chain fell 6.3 per cent.
Analysts had expected like-for-like sales at Argos to fall around 0.25 per cent and slide by about 2.8 per cent at Homebase.
Shares in Home Retail, which have outperformed the general retailers' index by around 8 per cent in the past year, were up 3.1 per cent at 279.75 pence.
The stock matched the DJ European retail stock index, which was the best performing European sector and stood up 3.1 per cent at 9:20am.