Home furnishings retailer Dunelm has reported another year of record sales as turnover surpassed £1.6bn.
According to its preliminary results for the 52 weeks to 1 July 2023, total sales rose 5.5% to £1.64bn from £1.55bn in 2022, while overall market share increased to 7.2% with a gross margin of 50.1%.
Pre-tax profit margin of 11.8% (FY22: 13.5%) was robust, demonstrating the “underlying resilience of the business and tight operational controls”.
Profit before tax resulted at £193m, down from £209m, reflecting tight control of margin amidst inflation in its operating costs and ongoing commitment to investment for the future.
During the period, Dunelm saw active customer numbers grow by 2.8% with “improved customer retention”, while it also passed on cost reductions across over 1,000 products in the spring.
Furthermore, as Dunelm grows its offer into new areas, it remains “highly focused on ensuring value at all price points”, even within more nascent categories. “We have increased our curated range by approximately 20,000 products in the last year with the same product quality and price focus,” the retailer said. “We will continue to grow our ranges in this way, with further additions in categories such as nursery furniture and live plants.”
Three new stores were opened, including one relocation, as Dunelm continued to see strong payback underpinning confidence to accelerate openings over the next two years.
The company saw further community engagement with circular solutions, such as take-back services, a threefold increase in its ‘Delivering Joy’ gift campaign for local causes, and over £800k raised for charities.
“Over the next 12 months we will further improve our website experience by using new search tools, introducing faster site architecture and increasing the options for delivery of furniture items,” Dunelm revealed. “We will continue to expand our product offer, with new ranges and made-to-measure categories as well as launching further convenient payment options such as long-term credit.
“To improve the efficiency of our operations, we will launch new tools for forecasting and replenishment and improve the management of stock in our warehouses, with both of these initiatives also increasing availability for our customers. We will also increase our personalised communication with customers.”
As for current trading, Dunelm said it is “pleased” with early performance and while consumer behaviour remains “unpredictable” it expects to see FY24 sales and PBT growth, driven by volume.
Nick Wilkinson, Chief Executive Officer, commented: “In a period of extensive economic uncertainty, we have maintained our focus on enhancing our customer proposition, expanding our offer whilst staying fully committed to value and making every pound count. This has clearly resonated well with our customers, enabling us to continue growing both sales and market share. As ever, our amazing colleagues have been at the heart of this performance and I thank them all for their knowledge, personality, commitment and enthusiasm.
“As we manage the ongoing challenges, it is crucial that we do not lose sight of our longer-term ambitions. We are committed to raising the bar on value and joy for our customers and continuing to invest where we see good returns, so that we can seize the various opportunities ahead.
“We are excited about our future growth opportunity and more confident than ever that our commitment to value and tireless focus on improving the experience for our home-loving customers will leave us well placed to deliver sustainable growth in the future.”
