Dunelm is ‘well placed’ to cushion the blow from supply chain and shipping woes as sales continues to rise
- Group says lower seasonal products levels will help it avoid supply chain issues
- Trading update reveals fresh sales boost and an on-track full-year forecast
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 £179million, which is in line with analyst forecasts.
Optimistic: Dunelm Group has said it remains upbeat about its ability to operate amid global supply chain woes and shipping delays
Shares in the FTSE 250-listed company jumped in early morning trading and are currently 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 fallen by around 14 per cent in the past year.
In the 13 week period to 25 September, the retailer’s total sales increased by 8 per cent to £388million. 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 (which was postponed from the fourth quarter of FY21), 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 £209million worth of cash in the bank, and access to £175million of approved banking facilities that have not been used yet.
On the up: Shares in FTSE 250-listed homewares retailer Dunelm have jumped today
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.
‘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 1st choice for home for more UK shoppers.’
Freetrade analyst Gemma Boothroyd, said: ‘Dunelm’s first-quarter results seem to say it’s not just a one-hit pandemic wonder.
‘Dunelm’s working up against a number of challenges and changes, which will make it increasingly hard to reach those peak-Covid sales volumes again. Though it fared pretty well this quarter, with sales not only up on last summer, but on the year prior too.’