Dunelm like-for-likes jumped 9.3% in its first quarter although gross margin was down 220 basis points.
Total sales for the 13 weeks to September 30 surged 24.8% to £247.9m as the business was boosted by favourable weather.
This is the first update from Dunelm since boss John Browett stepped down from the business at the end of August.
The homewares retailer insisted the margin fall was in line with its expectations.
It said the lower margin of Dunelm’s online business Worldstores accounted for 120 basis points of the margin decline, while 100 basis points were lost due to the higher seasonal sales mix, which it said would not continue throughout the year.
For the full year, it expects Dunelm’s gross margin to be in line with the prior year and group margin to be “down slightly” due to Worldstores.
Dunelm chairman Andy Harrison said: “We have maintained the good momentum from the final quarter of the last financial year.
“Our like-for-like sales were boosted by favourable weather comparatives and, pleasingly, we continue to outperform the homewares market, with strong growth across the business, especially online.”
A ‘genuine multichannel retailer’
Harrison said the integration of Worldstores, the etail group that owns Kiddiecare and Achica that Dunelm bought late last year, was on plan and “good progress” had been made in the quarter.
“We are well on the way to becoming a genuine multichannel retailer, with 16% of sales in the quarter online,” said Harrison.
“We head into the second quarter having opened a number of new stores and with an improved seasonal offer for the Christmas period, which we’re sure will resonate well with customers.”
Dunelm opened five stores over the quarter, taking its total to 165. It will open a further five shops before the end of the year. It continues to boost its presence in London and the Southeast and now has 11 shops inside the M25.