Dunelm shares leap on profits upgrade
The homewares retailer reported sales up 5% in its final quarter to June 29 at £399 million, up from growth of 2.6% in the previous three months.
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Homewares retailer Dunelm has upgraded its annual profits outlook as it overcame consumer spending pressures and Red Sea shipping woes.
The 183-strong chain reported sales up 5% in its final quarter to June 29 at £399 million, up from growth of 2.6% in the previous three months, despite cooler weather hitting summer sales of outdoor furniture.
It said profit margins were also boosted as it managed to offset the potential impact of extra shipping costs linked to disruption in the Red Sea.
Dunelm now expects annual pre-tax profits to be slightly ahead of the £200 million pencilled in by most analysts and up from £192.7 million in the previous year, hailing its “inherent resilience and agility in another challenging year”.
Shares jumped 8% in morning trading on Thursday after the upgrade.
Dunelm also said signs are pointing to an improving outlook for consumer spending, but it added a note of caution.
“Whilst there are indicators that the consumer outlook is set to improve, the impact and timing on our markets remains unpredictable,” it said.
The group said it saw a good summer sale season in June, although outdoor furniture sales were a weak spot due to the unseasonably cold early summer weather.
Nick Wilkinson, chief executive of Dunelm, said: “Amidst ongoing consumer caution, our unrelenting focus on value and choice means the Dunelm proposition has continued to resonate with customers, and we saw both full-priced and discounted lines trade well during our summer sale period.
“Throughout the year, we grew sales and continued to exercise tight cost control in an environment of high inflation.”
He added the group will continue to expand and invest over the new financial year, but said soaring wages mean it will need to keep a tight rein on costs.
“We will need to maintain strong operational grip given ongoing wage inflation,” he said.
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