Dunelm Sees Profits Soar

Dunelm’s interim results for the 26 weeks ended 28 December 2019 show total like for like (LFL) revenue growth of 5.6%, against a strong comparative period, with profits up by nearly 20% (19.4%) year on year.

The retailer says it has outperformed the homewares market, which in general has declined by 1.4% in the first half of the year, compared with Dunelm’s +2.3% growth.

“We have made good progress over the first half, following a strong performance last year, which is reflected in the significant growth delivered in both sales and profits,” said Dunelm’s ceo Nick Wilkinson.

Dunelm’s successful launch of a new digital platform has contributed to growth, while iStore sales have continued to grow across most product categories, driven by positive footfall, tablet-based selling and Click & Collect.

The retailer also reports growth of 8.8% in its ‘total unique active customers’ (those who have shopped in the last 12 months), spearheaded by improved brand awareness.  Dunelm has also been sponsoring ITV’s This Morning (up to March) and has just started a new sponsorship deal with Channel 4’s First Datesprogramme.

Gross margin improvement of 120bps are due to “sourcing efforts to mitigate currency headwinds and other cost price inflation” as well as fewer product markdowns, explained Nick Wilkinson. The company also benefitted by not participating in Black Friday 2019 or other pre-Christmas discounting.

He confirmed that Dunelm’s third quarter “has started well” and that full year profit before tax is anticipated to be “to be slightly ahead of the top of the latest range of analyst expectations.”

He also acknowledged: “We are monitoring the coronavirus outbreak carefully.  To date we have not assumed any material disruption to our supply chain or any financial impact in the year.”

 

Top: Dunelm is continuing to make “good progress”.

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