Argos owner Home Retail said it has no plans to sell its DIY chain Homebase despite rumours it is being pursued by US buyout funds.
Home Retail chief executive John Walden said: "There has been no decision to divest Homebase from the Home Retail Group. There is no sales process going on."
It was reported last month that private equity firms Apollo and OpCapita were circling the 316-store chain that has struggled to compete with rival B&Q.
Mr Walden was speaking as Home Retail posted second quarter group trading which showed that Argos like-for-like sales were up for the ninth quarter in a row following a rise of 1.2%.
However, same-store sales at Argos were below analyst expectations of 3.4% for the 13 weeks to August 30. Total sales at Argos lifted 1.4% to £901 million.
At Homebase, like-for-like sales were up by just 0.1%, aided by a growth of big ticket items which offset a decline in seasonal items.
Total sales at Homebase fell 2.8% to £390 million, after six stores closed during the quarter to bring shop closures to a total of seven for the half year.
During the quarter Argos said strong sales of TVs, electrical products and white goods offset declines in furniture, homeware and jewellery.
The chain, which has 747 stores, said it sold 340,000 TVs on the back of the World Cup.
Homebase added it sold enough kitchen worktops to cover the pitch at Wembley 40 times over.
Mr Walden said: "At this halfway point of the financial year we expect to deliver full-year group benchmark profit in line with current market expectations, however, as always the full-year outcome will depend upon Argos' Christmas trading period."
Analysts expect the group to post full-year pre-tax profits up 10% to £127 million.
Home Retail shares fell more than 6%.
Hargreaves Lansdown equity analyst Keith Bowman said: "With Home Retail considered to be highly geared to the health of the UK consumer and the valuation leaving little room for disappointment, the below forecast sales performance at Argos may have prompted some profit taking."
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