Value homewares retailer Dunelm brought forward its trading update after better than expected trading.
The retailer said like-for-likes jumped 15.1% in the 17 weeks to October 31 and profits will be higher than anticipated. Total sales rocketed 25.5% to £154.7m as Dunelm made further market share gains and gross margin improved 200 basis points year on year.
Dunelm chief executive Will Adderley said: “The group is well positioned to achieve a sales and profit out-turn for the first half of the financial year comfortably ahead of our previous expectations. We believe that we are growing substantially more quickly than
The retailer said the strength and relevance of its “simply value for money” proposition lifted sales, as did reduced competition following the collapses of Woolworths and other, smaller, retailers.
Dunelm also benefited from “relatively resilient consumer spending” and weak comparative figures.
Despite the upswing, the retailer said it is “much more cautious” about the second half, when the benefits of rivals’ withdrawal will have passed, VAT is expected to rise, public spending cuts are feared and unemployment is likely to climb.
However, Dunelm expects to open 12 stores this financial year. Singer Capital Markets analyst Matthew McEachran said he believed factors such as the retailer’s strong management and depth of range would help ensure future growth.