Investors cheer Home Retail Group

Shares in Home Retail Group leapt on Tuesday after Argos sales held up, delighting investors who expected them to be hit by bad weather.

The stock jumped 16% in early trading after Argos revenues came in at £819m for the quarter, down 0.2% on a like-for-like basis.

The City consensus was for a 4% fall in like-for-like sales in the three months to the start of June after the wettest April in 100 years.

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Some analysts had pencilled in a drop of up to 6%.

Sales of consumer electronics at Argos improved and were level with the previous year, driven by continued strong growth in laptops and tablets.

This offset sales declines in the TV, audio and video gaming categories for which it said the markets remained challenging.

Margins were also hit at Argos, dropping 0.25% due to adverse sales mix and ongoing price investment, Home Retail said.

But the group reported it was making progress in its multi-channel approach to Argos.

Its online Check & Reserve service grew 24% and represented 29% of total Argos sales while total internet sales grew 17% and represented 41% of total Argos sales.

The bounce in the share price seemed to ignore the fact the group was hit by an 8% fall in sales at Homebase.

Like-for-like sales at the DIY chain declined by 8.3% in the three months to June, driven down by seasonal products, which make up almost half of total sales and dropped by 15%.

This was in line with consensus expectations, however some forecasters had prepared themselves for a drop as big as 12%.

The firm said big ticket sales were also down in a market that continued to be challenging, while sales for the remaining categories were level.

Homebase pulled in total revenues of £421m, which benefitted from fewer promotions and helpful currency movements driving up margins.

"At this early stage of the financial year we are comfortable with current market expectations for full year benchmark profit," said Chief Executive Terry Duddy.

"We will continue to plan cautiously, managing robustly both the cost base and the cash position of the group while prioritising our investment in the ongoing development of our multi-channel capabilities," he said.