'Black Friday' nerves trigger Home Retail profit warning

* Says full year profit won't meet current expectations

* First (Other OTC: FSTC - news) half profit up 10 pct

* Shares (Berlin: DI6.BE - news) fall up to 16 pct (Adds detail, CEO, analyst comment, shares)

By James Davey

LONDON, Oct (HKSE: 3366-OL.HK - news) 21 (Reuters) - Home Retail (Other OTC: HMRLF - news) , Britain's biggest household goods retailer, warned on its profit outlook on Wednesday, blaming uncertainty ahead of the key Christmas trading period and increased investment at its Argos chain.

Shares in the firm, which also runs do-it-yourself chain Homebase, fell up to 16 percent after it forecast profit for its 2015-16 year would be slightly below the bottom end of the current range of analysts' forecasts.

Analysts had expected an underlying pretax profit of 115-140 million pounds ($177-$216 million), compared with the 132 million pounds it made in the previous year.

Haitong analyst Tony Shiret said the forecast was worse than his own downbeat expectations.

"We would expect that management has some better visibility on likely pricing/promotional levels at Argos and does not like what it sees," he said.

Chief Executive John Walden said trading at Argos for the Christmas season was less predictable than usual as both retailers and shoppers weigh whether to repeat last year's trend of embracing the U.S (Other OTC: UBGXF - news) .-inspired Black Friday discount shopping day, which this year falls on Nov. 27.

British retailers have traditionally tried to sell at top prices in the run-up to Christmas before launching sales on Dec. 26, Boxing Day.

This uncertainty, increased investment in the launch of new home delivery and store collection offers at Argos, plus lower sales of TVs, tablets and white goods all contributed to the warning.

Last year Argos missed sales forecasts for the holiday season after a Black Friday shopping frenzy was followed by a sharp drop off in demand in the following weeks.

"We've certainly planned to participate (in Black Friday) and we're expecting it to be big. Our uncertainty is just about the extent and about the patterns over the course of the season," he told reporters.

Walden described last year's Black Friday as "almost an unnatural collection of orders and obligations to fulfil on a single day or a single weekend."

He said if that was repeated there was a potential for disruption, though the firm had learnt lessons from last year and had improved its capacity to meet orders.

Walden is transforming Argos, which contributes about 70 percent of group revenue, from a catalogue-based retailer into a digital-oriented business, targeting higher sales from mobiles and tablet PCs and making collections faster and easier.

Home Retail reported underlying pretax profit up 10 percent to 34.1 million pounds in its seasonally less important first half, helped by a stronger performance from Homebase. Total (Swiss: FP.SW - news) sales fell 2 percent to 2.6 billion pounds.

($1 = 0.6482 pounds) (Editing by Jason Neely and Keith Weir)