Dunelm boosts profit forecast thanks to strong sales of seasonal lines

Dunelm expects its annual profit to come in ‘slightly’ ahead of previous forecasts, but the retailer’s 2023 earnings will still fall short of last year.  

Sales were up by 6 per cent year-on-year in the 12 months to 1 July to £1.64billiobn, marginally beating market forecasts of £1.63billion, after fourth quarter revenues of £381million.

Cooler weather drove sales of its bedding and rugs ranges, while its Summer Living collections, namely garden furniture and decorations, performed well in the warmer weather towards the end of the period, Dunelm said. 

In charge: Nick Wilkinson is the chief executive of Dunelm 

The retailer, which reduced the prices on over 1,000 lines in its fourth quarter, expects profit before tax for the full year to be ‘slightly ahead of current market expectations’ of £188million.

Dunelm shares rose today and were up 2.4 per cent or 26.71p to 1,139.71p this afternoon, having climbed over 37 per cent in the last year. 

Nick Wilkinson, Dunelm’s chief executive, said: ‘The breadth and relevance of our product offer has continued to resonate with our home-loving customers over the last quarter of the year. This has been reflected in our strong financial performance despite the challenging broader consumer backdrop.

‘Against this backdrop, our commitment to value is stronger than ever. During the quarter we lowered prices on over 1,000 lines, and our customers were also able to take advantage of great offers in our Summer Sale.’

He added: ‘We continue to focus on further strengthening our product mastery, developing our stores, enhancing our digital channels, and building out our marketing ecosystem, in order to create an even better experience for our customers.’

The group added: ‘We are pleased with trading so far in the new financial year. Whilst the consumer outlook remains uncertain, we will keep focussing on delivering outstanding value and relevance to our customers.

‘We will continue to invest thoughtfully for the future and are excited by the opportunities ahead to achieve further market share gains.’

John Coldham, a retail partner at Gowling WLG, said: ‘Shareholders will be pleased with the sales growth the business has achieved by appealing to consumers with its affordable prices and reliable products.

‘The cost of living crisis will continue to pose a challenge for the home furnishings retailer as consumers are more wary of their spending and the impact of inflation. But having picked up some sales from failing rivals and an increase in e-commerce, there is plenty of reason for investors to be optimistic.

‘Managing costs will be crucial to Dunelm’s future success and the brand will want to focus on smaller ticket items rather than larger purchases amidst the economic downturn until consumer confidence returns.’

This post first appeared on Dailymail.co.uk