The group said it now expected pre-tax profit to be between £250m and £255m, compared to its forecast in January, which expected profit to be around the mid-point of its previously guided range of £250-275m.
Total sales at Argos for the eight weeks to February 26th, saw a like-for-like sales decline of 4.6 per cent to £520m. Net new space contributed 1.5 per cent, bringing the overall sales drop to 3.1 per cent.
Over the full year there have been a net six openings, increasing the portfolio to 751 stores; in addition, six stores have been relocated during the year.
The retailer said the video gaming market has continued to be weak, while the toy categories remained in growth. This is a similar picture to the results released by Argos at the beginning of the year.
Internet sales grew to represent 36 per cent of Argos sales, up from 33 per cent a year earlier; this was driven by the continued popularity of online reservations for store collection.
Terry Duddy, chief executive of Home Retail Group, commented: “There are clear signs of further pressures on consumer spending, with recent trading conditions, particularly at Argos, proving to be more difficult and volatile than we anticipated.
"As a result, Group benchmark PBT for the year just ended is now expected to be between £250m and £255m. Against the backdrop of the challenging economic environment, and taking in to account our most recent trading, we are now planning with increased caution for the year ahead.
"The Group has a strong financial position and we continue to focus on driving forward our operational performances while investing further across the businesses.”