Dunelm upbeat amid global supply chain woes, shipping delays

by Jonathan Adams
Dunelm

In a trading update, the group said it expects its full-year profit to come in at around £179 million, which is in line with analyst forecasts

Dunelm Group has said it remains upbeat about its ability to operate amid global supply chain woes and shipping delays.

The homeware retailer said the fact it sells a limited number of seasonal products, has ‘good’ stock levels and customers willing to substitute products would all help cushion the blow from wider supply chain problems.

In a trading update, the group said it expects its full-year profit to come in at around £179 million, which is in line with analyst forecasts.

Shares in the FTSE 250-listed company climbed in early morning trading and are up 2.15 per cent or 28.00p to 1,328.00p. A year ago the share price was 1,557.00p, meaning it has dropped by nearly 14 per cent in the past year.

In the 13 week period to 25 September, the retailer’s total sales rose by 8 per cent to £388 million. Thirty-three per cent of the sales were made online.

The group said: This strong performance was mainly driven by the positive customer response to our Summer Sale in July, improved product availability and some popular new ranges in our furniture categories.

During the period, Dunelm’s gross margin was 0.1 per cent lower compared to last year, reflecting discounts on products.

Gross margin for the first half is expected to be flat to slightly positive compared to last year’s numbers, while full-year gross margin will drop because of the summer and winter sale, the group said.

Data from GfK revealed that Dunelm continued to outperform the homewares market and gained further market share in each week of the quarter.

At 25 September, Dunelm had £209 million worth of cash in the bank, and access to £175 million of approved banking facilities that have not been used yet.

Nick Wilkinson, Dunelm’s chief executive, said: We are pleased with our performance in the first quarter, with sales growth across all channels and continued market share gains, especially given the strength of the comparative period last year, which benefited from pent-up demand following the first UK lockdown.

We continue to invest in enhancing our market leading proposition to win more customers who shop more frequently across Dunelm’s expanding range. For example, we have now developed a “my favourites” functionality online, which is another step in getting closer to our customers and making their homewares shopping as easy as possible, he said.

He said: In the current environment, our purpose to help customers create the joy of truly feeling at home feels increasingly relevant and we are excited about our plans to become the first choice for home for more UK shoppers.



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