Value homewares retailer Dunelm has revealed a better than expected first quarter after posting positive sales growth against tough comparables.

Although like-for-like growth has slowed since its full-year results, when it posted an 8% rise, the retailer said that the 2.1% growth in the quarter was “very encouraging, given the context of an exceptionally strong performance in the comparative period last year”, when like-for-likes rocketed 15.4%.

Shore Capital analyst Ramona Tipnis called Dunelm’s update “robust indeed”.

She said: “Despite being against very strong comps, like-for-likes have continued to grow. Space growth also contributed strongly. This has not been at the expense of gross margins, which are up again.”

KBC Peel Hunt analyst John Stevenson said trading in the period “surprised” with the “positive start”.

He said: “With prior year like-for-like comparatives toughening sharply, we had not expected Dunelm to move back into positive like-for-like sales growth.

“Consensus estimates point to pre-tax profits of £83m. While the first quarter is not the most important quarter in absolute terms, we believe the positive like-for-like sales gain bodes well for the year ahead and is likely to push consensus expectations higher.”

He added that Dunelm is “one of the few organic growth stories in UK retail”.

Dunelm’s total sales increased 11.6% to £126.7m in the 13 weeks to October 2.

It said that the uplift reflected the “continuing strength of Dunelm’s Simply Value For Money proposition” as well as the benefits from the continuing roll-out of Dorma centres within new and refitted superstores, and “significant expansion of the kitchenware offer”.

Gross margin grew 100 basis points in the quarter.

Dunelm chief executive Will Adderley said: “We remain cautious about the UK consumer environment, but are encouraged by the strength of trading over the first quarter and we are pleased with our pipeline of new store openings.”

Three new superstores were opened during the first quarter, including one relocation of an existing store. Dunelm trades from 96 superstore locations in the UK.

Dunelm expects to open a further five stores in the second quarter.