Homewares specialist Dunelm has posted a fall in quarterly sales but described trading as “robust” and maintained profit forecasts in the face of tough trading conditions. 

Dunelm store front

Dunelm said its “tight operational grip” would ensure a full-year margin of approximately 50%

Dunelm’s sales fell 8% to £357m – up 36% on a three-year basis – in the first quarter. The retailer said the decline was “as expected” against a strong comparable period last year when there was pent-up demand in the wake of the pandemic.

Gross margin was down 130bps year on year, “reflecting more normal patterns of customer behaviour”, but Dunelm said its “tight operational grip” would ensure a full-year margin of approximately 50%. 

Dunelm said that, while the macroeconomic environment remains challenging, its business model and focus on “mitigating external headwinds whilst making decisions for the long-term” is helping it deal with rising inflation, and full-year earnings guidance given at last month’s full-year results remains unchanged. 

Chief executive Nick Wilkinson said: “It has been another robust quarter, which illustrates the strength and resilience of our business model and the appeal of our market-leading offer.

“Dunelm has emerged from the last two years as a bigger, better business. We have benefited from the commitment, expertise and adaptability of our colleagues and supplier partners – the same qualities that are serving the business as we navigate the current inflationary challenges.

“As we enter what will clearly be a challenging winter for consumers, our absolute focus remains on making every pound count for everyone, through a tight grip on operations.

“We will continue to offer outstanding value at all price points so our customers can make their own choices around adapting to the economic backdrop. This focus on value has seen Dunelm successfully navigate previous periods of economic uncertainty.

”The landscape is a demanding one, but we feel both energised and confident in our ability to grow market share.”

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