Dunelm reveals subdued second quarter trading
Dunelm has announced that it expects its full year pre-tax profit to be at the lower end of market forecasts after sales growth slowed towards the end of last year.
In a first half trading statement, the homewares retailer said sales edged up 1.6% in its second quarter to £498 million while first half sales rose by 3.6% to £926 million.
Subscribe to TRBSecond quarter growth was driven by core categories such as bedding, towels, lighting and made-to-measure. However, trading in the furniture category was softer as a result of “availability challenges” which are being addressed.
Dunelm explained that following a strong first quarter, trading was “more challenging” in the second quarter, especially in the run-up to Christmas, when the retailer saw higher levels of digital marketing and discounting by its competitors.
The retailer said customers have responded well to its winter sale since the quarter end.
Clo Moriarty, Dunelm chief executive, said: “We delivered a solid first half, and I’m really proud of all our colleagues for their efforts over this busy period. The performance reflected a strong first quarter followed by a more challenging close to the half.
“Whilst the UK retail environment remains variable, we have acted on some clear lessons from the first half, including targeted steps to improve availability, ensuring customers can access our fantastic ranges seamlessly, however they are shopping with us.”
Due to the softer trading performance, Dunelm is now expecting pre-tax profit for the first half to be approximately £112 million to £114 million and pre-tax profit for the full-year to be at the lower end of consensus expectations.
Looking ahead, Moriarty said: “I see multiple opportunities to extend Dunelm’s market-leading position – there is much more in the tank. As such, we are now moving forwards with energy and discipline, actively building new plans whilst executing existing ones to ensure we are the first choice for all home lovers.”
