Dunelm has suffered a slump in profit during the first half of its financial year as a “weaker market” and “supply chain disruption” hampered performance.

The homewares business said pre-tax profit during the 26 weeks to December 31, 2016 tumbled 26% to £55.9m.

Excluding the exceptional costs associated with last year’s acquisition of Kiddicare owner Worldstores, Dunelm’s pre-tax profit fell 11.3% to £67m.

Total sales climbed 2.8% to £460.5m during the period, but increased at the slower rate of 1% to £452.4m when stripping out the five weeks of Worldstores trading post-acquisition.

Dunelm said total like-for-like sales, including its online business, slipped 1.6% during the period.

Like-for-likes in stores fell at the steeper rate of 3.1% to £389.4m.

In contrast, Dunelm’s online business continued to grow at pace, registering a 20.1% spike in sales to £33.7m.

A ‘transitional year’

The retailer said trading during its first half was “softer than expected” due to a “weaker market” and “unusually warm weather”, which dented footfall.

It added that “short term supply chain disruption” following the sluggish start-up of a new depot caused lower availability in stores and sparked unplanned one-off costs of £3m to “smooth out the issues.”

Despite those teething problems, Dunelm said it increased its market share through the growth of its online business and the opening of five new stores during the period.

It plans to open another five before the end of its current financial year.

Dunelm said it was also working on “detailed integration plans” as it combines its business with Worldstores.

The retailer’s boss John Browett insisted Dunelm was in the midst of a “transitional year” and said the first half had been “particularly busy”.

Browett added: “Whilst we are operating in a challenging retail environment, especially in homewares, we remain focused on investing in and developing our business for the future.

“We are still in the midst of this exciting journey, and whilst trading was slightly softer than we would have liked due to a weaker market, we continue to increase our share and are confident that we will emerge as an even stronger market leader.”