Dunelm delivers resilient performance in Q3

Home furnishings retailer Dunelm has reported a growth in third quarter sales despite ongoing challenging conditions.

According to its latest trading update for the 13-week period ended 30 March 2024, total sales increased by 3% to £435m.

Dunelm said that trading conditions have “continued to be volatile” with March in particular seeing softer levels of demand. “However, against this backdrop, our offer continues to resonate with customers and our volume-driven sales performance is underpinned by growth across both store and digital channels. We therefore believe we have continued to gain further market share in the period.

“The mix of digital sales increased by 1ppt reflecting the ongoing improvements we are making to our online customer proposition, such as improving the speed of the website.”

Dunelm added that it is making “good progress” building the ‘Home of Homes’ by strengthening its customer offer, extending and digitalising its total retail system and evolving its marketing ecosystem.

“We have successfully launched our spring / summer product ranges alongside our latest brand marketing campaign, which extends our brand platform by positioning Dunelm as the place to go for all of our customers’ home needs. We expect the television campaign to be viewed over 200 million times, with further exposure across radio, social, and other digital channels,” the retailer said.

“We remain on track to hit our store openings target for FY24, with four new stores open to date and a further two (including one relocation) planned to open by the end of the year. We have also continued to develop our digital customer proposition, now offering further flexibility on customer delivery options and multi-channel giftcards.

“We are continuing to apply our usual operational grip, including managing the impact of Red Sea disruption. Our availability has remained generally strong, benefitting from our committed supplier model, which along with the breadth of our ranges, has meant that sales have been largely unaffected to date.”

Looking ahead, Dunelm added that it expects FY24 PBT to be broadly in line with market expectations (company compiled consensus average of analysts’ expectations for FY24 PBT is £202m, with a range of £200m to £205m).

Nick Wilkinson, Chief Executive Officer, commented: “We have delivered a resilient performance in Q3, with continued volume-based sales growth through a period of more challenging and volatile market conditions. Whilst discretionary spend remains under pressure, our relevant and attractive product offer continues to resonate with customers as they shop across our broad ranges to find quality and value for all areas of the home. 

“This performance reflects our deep-rooted understanding of our customers and the effectiveness of a total retail system which continues to drive growth across store and digital channels, bringing further market share gains. At the same time, our operational grip continues to mitigate ongoing cost headwinds and has supported a strong gross margin performance.

“Looking ahead, we are excited about strengthening our customer offer, and the breadth of growth opportunities this presents. Consumer behaviour continues to be difficult to predict, however we remain confident in our ability to navigate current conditions whilst delivering further sustainable growth and market share gains.”

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