Home furnishings and homewares retailer Dunelm has reported strong sales growth with margin improvement during the first quarter.
According to its latest trading update for the 13-week period ended 30 September 2023, total sales rose 9% to £390m, driven by volume, while digital sales represented 35% of revenues.
“Growth was broad based across our categories with our new autumn/winter ranges, including new collaborations with Disney and the Natural History Museum, resonating well by offering colour and personality to help customers find joy as they enhance their homes,” Dunelm said.
“Our upholstery ranges also performed strongly, with good growth in sofas and sofa beds, where we have added new shapes and colours to our best selling ranges.”
Dunelm added that it benefited from a net tailwind from freight and foreign exchange rates. “We delivered growth in sales volume while improving gross margin by 120bps, consistent with our full year guidance for gross margin to increase by c.100bps year-on-year.”
The company said that it continued to “strengthen” its customer offer, with five-day lead times on most of its upholstery ranges, improving availability in categories such as cabinet furniture and introducing conscious choice options into its Christmas baubles ranges. The retailer also introduced new lines, such as live plants and personalised products.
Dunelm opened one new store during the quarter and a further three stores are expected to open before the end of Q2. “We are on track to achieve our full year target of five to 10 new store openings (including relocations),” the retailer said.
Nick Wilkinson, Chief Executive Officer, commented: “Our proposition, which offers an increasingly wide range of homewares products, continues to prove popular with customers, as we delivered another strong sales performance in Q1. We continue to have a laser focus on outstanding value, and customers can now find even more choice with the introduction of new ranges such as live plants.
“We are reaching more and more UK consumers through our expanding store estate, and our latest marketing campaign, which is our biggest to date, showcases the breadth of the Dunelm offer, reinforcing our position as ‘The Home of Homes’.
“There remains a significant opportunity for Dunelm to take further market share and we are excited about the progress we are making against our plans, through targeted and thoughtful investment, in order to seize the compelling opportunities ahead of us. We remain very confident about our prospects for continuing to drive sustainable growth.”
