12th Jan 2022 09:58
(Alliance News) - Dunelm Group PLC on Wednesday raised its profit expectation, after strong full-price sales in the second quarter.
The Leicester, England-based homewares retailer reported total sales of GBP407 million in the 13 weeks that ended December 25, its second financial quarter. This was up 13% on a year ago at GBP360.4 million in total sales and up 26% on two years ago at GBP322.4 million.
Digital sales represented 33% of this total, down from 41% a year ago, though up from 21% two years ago. Dunelm added that it continue to invest in its digital fulfilment capacity "at pace" moving forward.
Dunelm said that growth was broad based, across nearly all its product categories, adding that a strong performance in furniture reflected better availability and extended ranges.
Gross margin increased by 160 basis during the second quarter and 80 points during the first half, ahead of its expectations, amid higher full-price sales of seasonal ranges. Gross margin for the full year is now seen down 30 to 50 basis points from financial 2021, which is better than expected, the company said.
Dunelm said it expects first half pretax profit of GBP140 million, up from GBP112 million a year ago and GBP84 million two years before.
The company continued that, in the absence of any significant Covid-related disruption, the company expects that financial 2022 pretax profit will now by ahead of market expectations which is currently estimated between GBP167 to GBP190 million. Dunelm's financial year ends in June. In financial 2021, pretax profit was GBP157.8 million.
Looking forward, the retailer said it will mitigate the impact of inflation on commodity costs and freight rates by working closely with suppliers to create sourcing benefits, managing the mix of products across our price bands whilst maintaining choice throughout the range. Dunelm said it would also increase retail prices where appropriate.
Shares in Dunelm were up 4.9% at 1,406.00 pence on Wednesday morning in London.
By Heather Rydings; [email protected]
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