Home furnishings retailer Dunelm has reported a growth in sales with profit expected to be slightly ahead of current market expectations.

According to its latest Q4 trading update for the 13-week period ended 1 July 2023, Dunelm delivered “robust” sales growth of 6% with revenues reaching £381m. Digital sales made up 39% of total sales in the quarter, 2ppts higher than FY22.

During the quarter, Dunelm reduced prices on over 1,000 lines as part of its sale period. “We are pleased that in the quarter we saw particularly strong volume growth,” the retailer said.

“Our product offer continued to resonate strongly with customers throughout the quarter, with cooler weather driving sales of our bedding and rugs ranges, while our Summer Living collections, in particular garden furniture and decorations, performed well in the warmer weather towards the end of the period.”

As for the full year, total sales rose 6% to £1.6bn. Compared to FY19 (the last full year before any impact from Covid) total sales are nearly 50% higher and digital sales now make up 36% of total sales (FY19: 20%).

Dunelm said profit is expected to be slightly ahead of market expectations and gross margin for the full year is expected to be in line with its guidance of c.50%.

“We expect profit before tax for the full year to be slightly ahead of current analysts’ consensus of £188m. This performance reflects our continued robust sales performance, strong commercial disciplines and tight operational grip on costs.

“We will continue to invest in digitalising and developing our business to improve both our customer offer and to make our operations more efficient. Our next new store in South East London, our 180th, will open shortly, increasing the reach of our total retail system and bringing our offer to more communities.

“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.”

Nick Wilkinson, Chief Executive Officer, added: “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.

“We have a strong business model, with committed colleagues and suppliers, who strive every day to improve our customer proposition. 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. With these improvements to our customer proposition and business capabilities we see a compelling opportunity for sustainable and profitable growth and are confident about the future.”