Homewares retailer Dunelm (DNLM) has reported continued strong growth and market share gains for the first quarter ended 25 September 2021 in the face of demanding comparatives, sending the shares 1.2% higher to £13.15 on Thursday.
Impressively, the curtains, quilts and kitchenware seller’s total sales grew 8.3% to £388.8 million against a tough quarterly comparator from last year, when sales grew 36.7% after the retailer benefited from pent-up demand following the first UK lockdown.
Shares recently delved into the Dunelm backstory and explained what makes the high-quality retailer so special in this feature.
POSITIVE SALE, POPULAR RANGES
Dunelm attributed its robust quarterly sales performance to a positive customer response to its summer sale in July, as well as improved product availability and a boost from some popular new furniture ranges.
‘Given the strength of the comparative Q1 full year 2021 period, which benefited from some pent-up demand following store closures during the first national lockdown, we are pleased to have grown sales across the total retail system during the quarter, with digital sales growing at 20%’, explained the company.
‘This strong performance demonstrates the strength of our integrated offer, providing customers with an attractive digital proposition, combined with local, friendly and convenient in-store shopping experiences.’
WELL-EQUIPPED TO COPE
Gross margins softened by 10 basis points in the quarter due to the timing impact of the postponed summer sale and are expected to be 50-to-75 basis points lower than last year for the full year as cost price increases bite.
Nevertheless, Dunelm feels ‘well placed relatively’ to cope with current supply chain disruption and inflationary pressures from freight and driver shortages, with good stock levels across its stores, warehouses and suppliers providing some cover.
And in the absence of a hit to consumer confidence from any further Covid-related lockdowns or other industry shortages, Dunelm expects to deliver full year pre-tax profit in line with analysts’ recently upgraded £167 million-to-£190 million forecast range, with consensus of £179 million.
‘We continue to invest in enhancing our market leading proposition to win more customers who shop more frequently across Dunelm’s expanding range’, enthused digitally-savvy CEO Nick Wilkinson.
For instance, the company has now developed a ‘my favourites’ functionality online, which Wilkinson sees as ‘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 first choice for home for more UK shoppers.’
