Homewares retailer Dunelm impressed the City with higher than expected second-half sales and ambitions to open more stores in the financial year.
Like-for-likes rose 5 per cent in the 26 weeks to June 27, while total sales jumped 10.7 per cent to £215.2m. In the 52 weeks to the same date, like-for-likes slipped 0.5 per cent and total sales increased 6.3 per cent to £417m.
Dunelm said it took market share in the year and expects gross margin to increase 120 basis points by the year-end.
The retailer upped its ad spend as it “exploited opportunities to purchase additional press and radio coverage at favourable rates”.
Six superstores opened in the year, taking Dunelm’s store count to 82 superstores and 12 older-format high street shops. 10 more leases have been signed and are expected to open in this financial year.
UBS analyst Andy Hughes said the 5 per cent like-for-like growth was 10 times greater than expected. The broker forecasts that the retailer will open eight stores this year, but Hughes said Dunelm could open double that number “if the right opportunities come up”.
Citi analyst Richard Edwards said the “strength of the results should act as a positive catalyst” on the share price.
Dunelm chief executive Will Adderley said: “It’s a solid performance. We have a strong customer offer in these challenging times and it’s a good time to be acquiring stores. We’ve grown market share.”