Dunelm set for drop in profit after sales fall
Homewares retailer Dunelm saw its sales decline by 29% in the 16 weeks to 27 June after like-for-like store sales dropped by 49.7%.
In contrast, there was an 85.2% increase in ecommerce sales due to customers switching to online shopping during the Covid-19 lockdown.
After being given permitted status by the government in mid-May, Dunelm was allowed to reopen its stores from that point and had most shops open and trading by the end of May. Sales recovered to a 20% increase in June after falling by 78% and 48% respectively in April and May. Dunelm said the uplift could be partly attributed to pent-up consumer demand and the delayed start to its summer sale.
Nick Wilkinson, Dunelm‘s chief executive, said: “The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business. This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers.”
Reporting on its full year results, Dunelm said sales fell by 3.9% year-on-year to £1.05 billion. The retailer now expects its full year pre-tax profit to be in the range of £105 million to £110 million compared to £125.9 million in the previous year.
Although pleased with customers’ response to the reopening of stores, the retailer will be remaining cautious over its short to medium term outlook due ongoing uncertainty around the pandemic. It is also expecting to be facing some cost headwinds due to the continued implementation of social distancing measures in its stores and distribution centres.
Looking ahead, Wilkinson added: “There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment.”
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