Dunelm raises profit forecast on strong seasonal line sales
- Dunelm says annual earnings will be “slightly” higher than expected
- Dunelm shares rallied Thursday and are up more than 37% over the past year
Dunelm expects its full-year profit to be “slightly” higher than previous forecasts, but the retailer’s profit for 2023 will still lag last year’s.
Revenue was up 6% year-on-year in the 12 months to July 1 to £1.64 billion, slightly better than market expectations of £1.63 billion, following fourth-quarter revenue of £381 million.
Cooler weather drove sales of bedding and rugs, while the Summer Living collections, namely outdoor furniture and decor, performed well in the warmer weather towards the end of the period, Dunelm said.
Responsible: Nick Wilkinson is the CEO of Dunelm
The retailer, which slashed prices on more than 1,000 lines in the fourth quarter, expects full-year pre-tax profit to be “slightly above current market expectations” of £188m.
Dunelm shares rose today and rose 2.4 percent or 26.71 p this afternoon to 1,139.71 p, after rising more than 37 percent in the past year.
Nick Wilkinson, chief executive of Dunelm, said: ‘The breadth and relevance of our product offerings continued to resonate with our home-loving customers through the last quarter of the year. This was reflected in our strong financial performance despite the challenging broader consumer environment.
“Against this backdrop, our pursuit of value is stronger than ever. During the quarter, we reduced prices on more than 1,000 lines, and our customers also benefited from great offers in our Summer Sale.”
He added: “We remain focused on further strengthening our product mastery, developing our stores, improving our digital channels and building out our marketing ecosystem, to create an even better experience for our customers.”
The group added: ‘We are pleased with the trade so far in the new financial year. While the consumer outlook remains uncertain, we will continue to focus on delivering outstanding value and relevance to our customers.
“We will continue to invest thoughtfully for the future and are excited about the opportunities ahead of us to achieve further market share gains.”
John Coldham, a retail partner at Gowling WLG, said: ‘Shareholders will be pleased with the sales growth the company has achieved by appealing to consumers with its affordable prices and reliable products.
“The cost of living crisis will continue to challenge the home furnishing retailer as consumers become more wary about their spending and the impact of inflation. But with some sales picked up by failing rivals and an increase in e-commerce, there’s plenty of reason for investors to be optimistic.
“Controlling costs will be critical to Dunelm’s future success and the brand will want to focus on smaller tickets rather than larger purchases during the economic downturn until consumer confidence returns.”