In a trading update covering its Q1 (ended 25th September, 2021), Dunelm reports continued strong growth across its total retail system, plus market share gains.
Total sales in the quarter increased by +8.3% against a very strong comparative period in FY21, when sales grew by +36.7%. Dunelm says this performance was mainly driven by the positive customer response to its summer sale in July (which was postponed from Q4 FY21), improved product availability and some popular new ranges in the retailer's furniture categories.
Given the strength of the comparative period, which benefited from some pent-up demand following store closures during the first national lockdown, Dunelm is especially pleased to have grown sales across its total retail system during the quarter, with digital sales growing by +20%.
As of 25th September, the group had net cash of £209m and access to £175m of approved banking facilities which remain unutilised. Inventories at the end of the period were £168m, with good levels of availability across most of Dunelm's product categories.
However, Dunelm admits that the macro outlook remains uncertain, in particular regarding supply chain disruption and inflationary pressures from freight and driver shortages – Dunelm continues to work closely with its long-term suppliers and partners to mitigate the impact of these factors, and, given its good stock levels, a low proportion of seasonal ranges, and its customers' higher propensity to substitute products within homewares categories, feels relatively well placed to manage them.
In the absence of any significant change in consumer demand driven by further Covid-related lockdowns or other industry shortages, the board expects FY22's profit before tax to be in line with analyst expectations of £179m.
CEO Nick Wilkinson says: "We are pleased with our performance in the first quarter, with sales growth across all channels and continued market share gains, especially given the strength of the comparative period last year, which benefited from pent-up demand following the first UK lockdown.
"We continue to invest in enhancing our market-leading proposition to win more customers who shop more frequently across Dunelm's expanding range. For example, we have now developed a 'my favourites' functionality online, which is another step in getting closer to our customers and making their homewares shopping as easy as possible.
"In the current environment, our purpose to help customers create the joy of truly feeling at home feels increasingly relevant, and we are excited about our plans to become the first choice for home for more UK shoppers."
