Dunelm reports growth in shorter third quarter

Home furnishings retailer Dunelm reported three months of growth on Thursday, with total revenue for the third quarter increasing by 5.9%. Total like-for-like growth, combining like-for-like stores and home delivery, increased by 1.1%.

The company pointed out that, due to the 53rd week included in its last financial year, the period included six days fewer Winter Sale days year-on-year, reducing like-for-like growth by 4.9% or £1m in the third quarter, though that was partially offset by the earlier Easter contributing 1% towards performance.

Adjusting for the calendar impacts, underlying like-for-like performance was 5% for the 13 weeks to 2 April.

Dunelm reported strong footfall in like-for-like stores driven by Winter Sale performance, with improved conversion and higher transaction values year-on-year also contributing to growth.

Its store portfolio also expanded, with one new superstore opened and a number of medium-sized refits completed.

The firm also reported good growth in the online business, including a 27.6% increase in home delivery sales.

Gross margin for the quarter was 90 basis points higher than the previous comparative period, with the board putting this down to improved stock management and the reduced cost of end of season product clearance.

"We have enjoyed a good Easter, are looking forward to a successful final quarter and are confident of achieving our expectations for the full year,” said Dunelm chief executive John Browett.

The group’s total number of superstores trading at the end of the period was 152, with Dunelm planning to open two new stores in the remainder of the financial year. A further five store openings were expected to take place in the next financial year.

"We are pleased with the strong underlying sales growth during the last quarter following the unhelpful, mild conditions experienced in Q2. Overall we continue to increase our Homewares market share,” Browett said.

"We continue to work hard on delivering our key projects across the business and remain excited about substantially improving the business for our customers, both in store and online, over the medium term, and developing Dunelm into a truly national homewares brand."

On 24 March, Dunelm paid a special dividend of 31.5p per share, amounting to £63.9m. Reflecting that special dividend, the company’s net debt on 2 April was £85m.