HSBC sticks to a 'hold' on Dunelm even after CEO's hasty exit

Their expectation was for no immediate changes to the company's strategy; indeed, although Browett's focus on digital, modernising core infrastructure and the Worldstores acquisition had come at a cost, those changes were needed, the broker argued.

Furthermore, HSBC put disappointing growth and margins during Browett's reign down to adverse seasonality - which it believed was now reversing.

In any case, with consumer fundamentals worsening it was now all the more necessary for the Board to reassure investors when the retailer next published its full-year numbers, on 13 September.

Linked to the above, HSBC also pointed out how Dunelm's core categories were ultimately cyclical.

HSBC kept its target price for the shares at 600p.

"The small ticket nature of much of Dunelm’s product perhaps makes it more defensive but its products are essentially discretionary. Worsening consumer fundamentals, while they have yet to be felt, are ultimately a concern, more so given the departure of the CEO."