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(Alliance News) - Dunelm Group PLC on Thursday hailed its "resilient" third quarter as e-commerce growth helped spare the homewares retailer from a steeper sales decline during a period where its brick and mortar stores were hurt by Covid-19 lockdowns.
The FTSE 250 constituent expects annual profit to be at the top end of analyst estimates, should the company be spared from further virus restrictions.
Shares in the company were 2.5% higher at 1,381.00 pence each in London on Thursday morning, among the best midcap performers.
In the 13 weeks to March 27, total sales fell GBP236.6 million from GBP284.4 million a year earlier. Online accounted for just over 92% of Dunelm's sales during the period, compared to 23% a year earlier.
Dunelm's digital offering helped soothe the pain of store closures.
The company said: "We began the quarter on December 27, 2020 with 80 stores closed to customers, then increasing tiered restrictions led to further closures at the start of the new calendar year and the entire estate of 174 stores was closed by January 5, 2021.
"We have been permitted to offer click & collect services during the closure period in all stores, with the exception of five stores in Northern Ireland. Click & collect has allowed us to cover approximately 35% of prior year store sales, with our customer net promoter score of 83% demonstrating the positive response to our proposition."
For the year to date, Dunelm's sales are 10% to GBP956.0 million from GBP869.4 million.
Dunelm said its gross margin rose by 30 basis points during the quarter, this was mainly due to reduced promotional activity over the winter period. And looking to the fourth quarter, easier comparatives loom.
"Assuming stores re-open as expected and there are no further disruptions this financial year, we expect that gross margin in the fourth quarter will be ahead of the same period last year given that the prior year period was disrupted by the store closures in the first national lockdown," Dunelm said.
The company expects to see supply chain "disruption", in line with others in the retail sector.
Dunelm added: "We are anticipating a strong consumer response to the lifting of the restrictions; our stores are well stocked and ready for re-opening and our colleagues are excited to welcome customers back."
Assuming there are no further virus restrictions, Dunelm expects its annual performance to be at the "top of the current range of analyst expectations". The pretax profit range currently stands at between GBP120 million and GBP125 million. In financial 2020, it posted a pretax profit of GBP109.1 million.
Dunelm cautioned that there is "still a range of potential outcomes for [financial] 2021".
By Eric Cunha; ericcunha@alliancenews.com
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