Dunelm’s turnover rises to nearly £400million as the furniture retailer benefits from stores staying open and pandemic restrictions being lifted
- Dunelm’s revenue rose 69% year-on-year to £399 million in the 13 weeks to March 26
- Digital revenue accounted for 35% of Dunelm’s total revenue in the third quarter
- The retailer increased its gross margin despite higher freight and raw material costs
Dunelm’s revenue was just under £400m in the most recent quarter as the homewares brand benefited from its stores staying open.
The FTSE 250 company has seen strong demand for its winter sale and ‘Summer Living’ range, as well as significant interest in the collaboration it has started with the Natural History Museum.
Sales in the 13 weeks to March 26 rose 69 per cent to £399m compared to the corresponding period last year, when the group’s stores were closed while England experienced its third national lockdown.
Results: Dunelm’s revenue rose 69 per cent to £399million in the 13 weeks to March 26 compared to the corresponding period last year, when England experienced its third national lockdown
During this time, Dunelm customers could only order their goods for home delivery or via a click-and-collect service, resulting in a decrease in overall purchases despite a rise in online retail.
But while the share of digital sales has declined sharply since then, they accounted for 35 percent of total sales in the third quarter.
The same move has boosted the company’s overall sales by 40 per cent, while having soared by over £300m in the year to date, thanks to in-store and online sales more than doubling.
Dunelm also managed to increase gross margins, which was attributed to selling a lower than expected proportion of its concession items during the winter sale.
This was despite rising raw material and transportation costs and the group spending significant sums to improve inventories to alleviate supply chain difficulties.
The Leicester-based retailer said this has pushed up inventory costs but still expects a pre-tax profit of between £195m and £215m this financial year, in line with previous forecasts.
Full Price Sales: Dunelm was able to increase gross margins due to the sale of a lower than expected proportion of its concession items during the winter sale
The forecast comes amid a deepening cost-of-living crisis affecting Britons, with UK inflation hitting its highest level in three decades and the energy price ceiling rising by nearly £700.
Dunelm Chief Executive Nick Wilkinson said: “While the macro environment remains uncertain, with significant headwinds and increasing pressure on consumers, our wide range of products offers a choice for every budget, whether replacing everyday essentials or refreshing a room in your home.
‘The resilience of Dunelm’s business model and the ability of our colleagues to adapt quickly to changing circumstances gives us confidence in our plans and we remain well positioned to continue to grow our market share.’
According to the company, around 85 percent of its expansion over the past five years has come from increasing its market share, but it also says its growth has been fueled by customers buying its products in small batches.
To continue this growth, the home furnishings retailer went into full operation at a new furniture warehouse in Daventry, Northamptonshire and opened a new superstore in Leeds, with another store expected by the end of June.
“The retail sector is undoubtedly facing a difficult outlook due to macroeconomic and geopolitical pressures,” noted Russell Pointon, director of consulting firm Edison Group.
Commenting on Dunelm’s performance, he said: “These are good results but the retail environment is currently facing potential headwinds from many quarters. Investors will be watching closely to see if this momentum continues.’
Dunelm Shares are up 1.8 percent to £10.79 as of late Thursday morning, despite having fallen by more than a quarter over the past three months.
Furniture retailer Dunelm sees sales jump to almost £400m
Source link Furniture retailer Dunelm sees sales jump to almost £400m