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Dunelm reports strong LFLs in second quarter

Published: 16 January 2018 - Fiona Garcia
 

Homewares retailer saw like-for-like (LFL) sales rise by 3.4% to £255million in the 13 weeks ended December 30, with online LFL figures soaring 30.5% but profits are expected to take a dip in first half.

Dunelm opened five new stores during the quarter and recorded that total revenue grew by 13.6% to £297.5million. It delivered a strong online performance, delivering £26.2million in Q2 – up more than £6million on the same trading period last year.

This climb has been attributed to the group’s acquisition of online homewares specialist Worldstores in November 2016.

Chairman Andy Harrison said: “Continuing rapid like-for-like online growth, of 36.8% in the first half, coupled with passing the first anniversary of the Worldstores acquisition, has helped our online sales grow to 16.0% of total sales in the first half (18.5% including Reserve and Collect). We are well on the way to becoming a genuine multi-channel retailer.”

However, gross margins took a hit, with a decline of 180 basis points for the first half, which is expected to have an impact on profits for the period. The company put this down to the addition of lower-margin sales from Worldstores, as well as a higher level of seasonal and end-of-season products in the wider range. Dunelm is expecting some margin improvement in the second half, as core margins were said to be in line with the previous year.

Dunelm opened a total of nine new stores in the first half, including five in Q2, which takes Dunelm's portfolio 169 stores. No further stores are currently expected to open in this financial year.

Commenting on Dunelm's performance, chairman Andy Harrison said: "After a good first quarter, it is pleasing to see our sales momentum maintained... This performance is driving our continued market share gains.”

He added: “Overall, we remain on track, with good sales growth and market share gains, offset by margin mix. We are well positioned to deliver good full year profit growth, after a small reduction in the first half, largely due to the consolidation of Worldstores losses."

 

 

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