The company raised forecasts for the year to 27 February as Homebase delivered a 4% rise in same-store sales in the 18 weeks to 2 January.
But chief executive Terry Duddy warned that the company expected trading conditions to remain challenging in the next financial year.
At Homebase, the recent recovery continued after total sales grew by 4.6% to £501m in the 18 weeks.
Big ticket items led growth but margins were hit by extra advertising, adverse exchange rates and increased import costs.
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