Argos reports soaring profits as they boost sales to £4.22bn
The retailer, which is owned by supermarket giant Sainsbury’s, has reported a revenue of £4.22bn for the 12 months to 2 March, 2024, up from the £4.15bn it posted for the prior year
Despite “Tough trading conditions”, Argos has managed to boost its sales and profit during the latest financial year. The retailer, a subsidiary of supermarket behemoth Sainsbury’s, reported a revenue of £4.22bn for the 12 months leading up to 2 March, 2024, an increase from the previous year’s £4.15bn.
The recently filed accounts with Companies House also reveal that its pre-tax profit rose from £27.7m to £37.3m over the same period. Furthermore, Argos increased its workforce from 7,045 to 7,731 in the past 12 months.
However, this figure is significantly lower than the 10,272 employees it had at the end of March 2022. During that financial year, Argos reported a revenue of £4.17bn and a pre-tax profit of £84.8m.
Argos attributed the turnover increase for its most recent financial year to growing sales at its in-store and collection point sales, despite a decline in sales at its standalone shops. On an underlying basis, it shifted from making a pre-tax profit of £69.8m to a loss of £13.4m.
For non-underlying items, Argos moved from a loss of £42m to a profit of £50.7m, as reported by City AM.
The company explained that it fell to an underlying pre-tax loss due to “lower general merchandise margins, reflecting higher promotional sales participation in tough trading conditions and the impact of margins of lower sales in higher margin seasonal categories”.
Sainsbury’s ‘transforms’ Argos.
For the same financial year, Sainsbury’s, which owns Argos, reported a revenue increase from £31.4bn to £32.7bn, while its pre-tax profit fell from £327m to £277m.
The supermarket giant attributed a 0.5 per cent drop in general merchandise sales to the closure of Argos in the Republic of Ireland.
However, it highlighted that Argos had achieved a “resilient” profit, having “transformed” its operating model in recent years.
Sainsbury’s stated: “Through reducing the standalone store estate, opening more Argos stores inside Sainsbury’s and driving greater operating efficiency, we have reduced operating costs by more than three per cent of sales since 2019/20.”
“This helped protect profits over the last year, where sales were resilient at a headline level but were skewed towards lower margin consumer electronics and technology categories, with poor weather against tough comparatives impacting sales in higher margin seasonal categories.”
