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(Alliance News) - Dunelm Group PLC on Thursday reported a substantial increase in sales in its third quarter, due to the reopening of its stores, leading the firm to confirm its confidence in meeting market expectations for annual profit.
The Leicester, England-based home furnishings retailer said total sales rose 69% year-on-year to GBP399 million in the 13 weeks to March 26, with year-to-date sales up 25% at GBP1.20 billion.
Dunelm explained that its store estate was closed in the comparable quarter last year, leaving only click & collect and home delivery services were available to customers.
Versus two years ago, third quarter sales were up 20%.
"Customers responded well to our winter sale held in the first few weeks of the quarter, with a very strong sales performance across most categories. We have continued to refresh our product ranges, with our new 'Summer Living' products performing particularly well during March, as customers looked to ready their homes and gardens for summer," Dunelm stated.
The company said its gross margin in the third quarter increased by 30 basis points year-on-year, and was better than expected due to a slightly lower proportion of sales from discounted lines during the Winter Sale.
At 26 March, Dunelm had net debt of GBP14 million. This compares to net cash of GBP40 million in the comparable period a year before. It explained this followed the payment of GBP75 million as a special dividend announced at its interim results in February.
The company continues to expect that its pretax profit for financial 2022 will be in line with the latest market expectations. It noted that the latest range of analyst forecasts puts its pretax profit between GBP195 million to GBP215 million, with the consensus at GBP207 million. In financial 2021, it posted a pretax profit of GBP157.8 million.
"Performance has been strong across all channels and our new facilities for e-commerce and furniture fulfilment are now fully operational, which will enhance our multi-channel proposition, whilst providing the capacity for further growth" Chief Executive Nick Wilkinson commented.
The firm added that it remains confident despite an uncertain macro environment, with increasing pressures on consumers.
Dunelm shares were trading 2.1% higher at 1,082.00 pence each in London on Thursday morning.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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