Dunelm eyes higher annual profits after strong fourth quarter
Homewares retailer Dunelm is forecasting that its full-year profits will rise by more than 7% after like-for-like sales grew by 5.5% in its fourth quarter.
In a trading update, the group said total sales climbed by 12% to £178.4 million in the 13 weeks to 28 June.
The 5.5% rise in fourth quarter like-for-like sales followed an improving trend in previous quarters as Dunelm continues to invest in key growth initiatives. However, the group said the rise was also partly a reflection of the impact of the summer 2013 heatwave which held back performance in the early part of this financial year.
In the year to 28 June, like-for-like sales grew by 2.1% while total sales increased by 7.8% to £730.2 million.
Never Miss a Retail Update!Dunelm said it had continued its strategy of strengthening and differentiating its customer proposition for the long term. Investments in the full year included the introduction of a new multi-channel fulfilment operation in October, the launch of the group’s first national TV advertising, and the roll-out of the ‘Dunelm At Home’ proposition.
Sales from new space contributed 5.7% growth over the full year, reflecting a continuing store expansion programme which included 12 new openings in the year. After opening two new stores in the fourth quarter, Dunelm’s superstore portfolio now comprises 136 stores, compared with its medium term target of 200 UK superstores.
Over the financial year as a whole, multi-channel revenues represented 6% of total sales, increasing to 7% in the final quarter.
Dunelm said it now expects to report a full-year pre-tax profit of about £116 million in September, up from £108.1 million in the previous year.
Dunelm chief executive Nick Wharton said: “We have continued our strategy of increasing scale through new store openings and multi-channel growth whilst investing in our customer proposition for the future. During the period we have increased the rate of that investment, ensuring we continue to provide our customers with market leading choice and expertise, helping us to maintain our differentiation from competitors over the long term.
“With a strong pipeline of new stores, further enhancements to our multi-channel capability and a positive response to the continuing development of our customer proposition, the Board remains confident in the Group’s long-term growth prospects.”
