Friday 19 July 2019

Dunelm ups profit outlook again as weather boosts sales

The homeware retailer now expects full-year pre-tax profits of between £124 million and £126 million.

Dunelm has upped its profit outlook again (Mike Cook/PA)
Dunelm has upped its profit outlook again (Mike Cook/PA)

By Holly Williams, Press Association Deputy City Editor

Homeware retailer Dunelm has upped its profit outlook for the second time in as many months after weather helped boost sales.

The group said it had seen “very good” like-for-like sales growth since its third quarter update on April 10, particularly in May and June.

It cited weaker comparative trading from a year earlier – when sales edged just 0.1% higher – and “unseasonably favourable weather conditions this year”.

The group now expects full-year pre-tax profits of between £124 million and £126 million.

This compares with £93.1 million last year.

Shares lifted nearly 6% after the profit cheer.

Dunelm has enjoyed a bumper financial year so far, with like-for-like sales up 12.5% in the third quarter.

It has been driving sales in the spring/summer season, partly through its new advertising campaign which includes a sponsorship deal with ITV’s This Morning.

The group’s garden ranges, including llama and flamingo lawn ornaments, has also proved a hit with customers as it gears up for the summer season.

Shares have risen nearly 70% this year as chief executive Nick Wilkinson has been leading a push to boost results, closing under-performing Worldstores and improving sourcing to increase profit margins.

Dunelm was founded in 1979 as a market stall business, selling ready-made curtains.

It opened its first shop in Leicester in 1984 and now has 171 stores nationwide and around 10,000 staff.

Emma-Lou Montgomery, associate director at Fidelity Personal Investing’s share dealing service, said: “The dismal summer weather so far has also encouraged stay-at-homes to beautify their nests and given Dunelm, the self-styled ‘home of homes’,  good like-for-like growth, in May and June in particular.”

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