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HRG said same-store sales at the Argos catalogue outlets rose 1.4% during the six months to 1 September, led by the growing popularity of flat-screen TVs.

This compared with a 2.5% drop in like-for-like sales at Homebase, which was hit by this summer's poor weather.

HRG's first-half pre-tax profits rose to �150m, beating market expectations.

'Uncertain outlook'

HRG said Argos had also seen strong sales of video games systems, mobile phones and car navigation systems.

"Although we remain cautious given the uncertain consumer outlook, as we move into the key seasonal period both businesses continue to enhance their customer offers," said HRG chief executive Terry Duddy.

Seymore Pierce analyst Andrew Wade said the results were "solid", but cautioned that Argos may face a difficult end to the year.

"With our bearish outlook for the [retail] sector, in particular, our concerns over the level of discounting that may be required to stimulate demand over Christmas, Argos looks to be in a difficult space," added Mr Wade.