Home Retail ups profit view

Sales at Argos stores open over a year fell 9.4 percent, worse than analysts' average forecast of a fall of 7 percent, according to a company poll of eight, and a rise of 0.1 percent in the 18 weeks to January 2.

Argos' sales were also impacted by its spring/summer catalogue being released one week later than last year.

Sales at the firm's Homebase do-it-yourself chain were down 0.6 percent on the same basis. That compares with analysts' average forecast of a fall of 2 percent and a rise of 4 percent in the prior period.

Gross margins were down 100 basis points at Argos and down 425 basis points at Homebase, reflecting the pressure on buying margins from the weakness of sterling versus the U.S. dollar and price cuts.

(Editing by Julie Crust, Mike Nesbit)