Dunelm ‘delighted’ as online sales soar and retailer makes the most of sponsorship deal with ITV’s This Morning
- Dunelm’s annual profit outlook upped amid strong quarterly results
- Flamingo and llama garden goods proving a hit with customers
- FTSE 250 group’s share price up over 2% so far in trading today
Home furnishing group Dunelm has bucked the trend for dismal retail results and posted a 32 per cent rise in online revenue for the three months to 30 March.
The group has upped in annual profit forecast after announcing its like-for-like sales increased by 12.5 per cent over the period. Total like-for-like sales are up by two-thirds so far this year.
Comparable sales in shops were up 9.8 per cent, against significantly weaker growth last year when shoppers were put off by the Beast from the East.
Boost: Dunelm enjoyed a sales boost in the last quarter, its latest figures show
Profitability also improved over the period, with an increase of 90 basis points to gross margins. This was driven by better sourcing and the closure of the Worldstores business.
The company said that although political and economic uncertainty remains high, it expects to report annual pre-tax profits that are slightly above market expectations.
Since 1 March, Dunelm has been the sponsor for ITV’s This Morning show. The contract continues for one year. Dunelm is also sponsoring the This Morning Live event in Birmingham in May this year.
The FTSE 250 listed group’s share price is up 2.43 per cent or 21.00p to 886.00p.
Chief executive Nick Wilkinson said: ‘We are delighted that customers continue to respond well to our improving homewares offer as we help them create a home they love.
‘The strong growth in the third quarter reflects our ongoing focus on attracting more customers to the brand and giving them more reasons to shop with us through great product and service. Our performance was also buoyed by a positive homewares market.’
The group, which as 169 stores across the UK, said it plans to open two further sites by the end of its financial year.
As at 30 March 2019, Dunelm’s net debt was £48.3million, down from £123.8million last year.
Looking ahead to the summer, Dunelm said it was already seeing garden ranges including llama and flamingo lawn ornaments proving a hit with customers.
Michael Hewson, an analyst at CMC Markets, said: ‘Just over a year ago Dunelm Group was another retailer warning about lower profits and margins as it struggled to integrate Worldstores.co.uk and Kiddicare.com into its business model.
‘It was also in the process of embarking on a turnaround plan and by calling time on these underperforming brands the company appears to have turned a corner. This was borne out earlier this year when management reported that group revenue rose 2% over the December period.
‘The renewed focus on the core brand appears to have reaped benefits in store and on line with increases in revenues on both sides of the ledger.’