- Dunelm sales up 6.6% to £261.9m in second quarter
- Excluding Worldstores acquisition, sales rose 3.3% to £253.8m
- Like-for-likes edged up 0.2% - dampened by trading dates
- 21.7% increase in home delivery sales
Dunelm reported flat like-for-likes in its second quarter, and claimed the homewares market continues to show signs of decline.
The homewares retailer’s total like-for-likes edged up a marginal 0.2% in the 13 weeks to December 31.
However, it said figures were dampened by a change in the accounting period. The quarter included six days of the retailer’s Winter Sale, compared with eight days last year, dragging like-for-likes down by an estimated 1.7% - equivalent to £4m.
It expects this negative impact to reverse in the second half of the year.
Total sales in quarter rose by 6.6% to £261.9m. Excluding its acquisition of Worldstores, sales grew 3.3% to £253.8m.
The retailer said the results were an improvement on its last quarter, with “seasonal product in particular performing well”.
It reported “good growth” in its online business, including a 21.7% increase in home delivery sales during the period.
Dunelm incurred a one-off £3m cost as a result of reduced in-store availability while it opened its new warehouse in Stoke and consolidated suppliers.
“We should see significantly less transitional costs in the second half of the year,” the retailer insisted.
Market in decline
The John Browett-led business warned that the homewares market has “continued to decline”.
It said that, in the quarter, it started to see some impact from adverse currency conditions, affecting goods sourced directly or from third parties.
“We expect this to increase as we move into the second half of the year,” it said, adding that it predicts gross margin will remain broadly flat in the second half.
Browett said: “Following a difficult first quarter we have seen an improvement in performance both in our stores and online.
“It was encouraging to see customers respond well to our seasonal product lines, especially our new Christmas offer.
“We have continued to outperform the homewares market in what is a challenging and volatile retail environment.”
Dunelm opened five new stores in the period, taking its store footprint to 157 stores. It plans to open an additional five superstores during its current financial year.
The retailer, which recently acquired the Worldstores group in a deal worth £8.5m, said it would also continue invest in the business, “particularly in systems, capability and marketing”.