Dunelm Group plc has issued a trading update for the third quarter of its current financial year, comprising the 13-week period ending 28th March 2015.
Total revenue grew by 10.7% to £216.2m. However, total like-for-like growth (combining LFL stores and Home Delivery) was more muted than in the first half of Dunelm's financial year – from +6.2% to +4.9% – reflecting, according to the retailer, the stronger comparative performance in the third quarter of last financial year.
In-store like-for-like sales grew by +2.9%, benefiting from a particularly strong winter sale performance as well as the continuing success of Dunelm's developing Made to Measure service and furniture proposition.
Home Delivery sales grew by 40% during the quarter. The launch of Dunelm's new web platform is expected to take place before the end of the financial year.
Non-like-for-like store performance includes sales from two new stores opened in the period, taking the total superstore openings in the financial year to date to eight, including one relocation.
Dunelm estimates that the gross margin for the quarter was consistent with the prior year, and that the gross margin for the full financial year will be broadly level year on year, subject to satisfactory clearance of excess furniture inventory during the fourth quarter.
The retailer's pipeline of legally-committed new store opportunities stands at 11, of which four are anticipated to open prior to the financial year-end. This will take the number of store openings for the full financial year to 12, and the superstore portfolio to 148 stores at the year-end – compared with its medium-term target to operate from 200 UK superstores.
The retailer continues to invest in its infrastructure to enable growth, recently committing to a second leasehold distribution centre close to its existing facility in Stoke, which will provide additional capacity to its network from spring 2016.
Will Adderley, chief executive, comments: "We have recorded solid sales growth over the last quarter, and we believe that we have continued to take market share on a like-for-like basis. We have a strong Easter event now in progress, a powerful summer sale to follow, and the launch of our new web platform before the end of the financial year, all of which leave us well placed to drive further sales growth through our final quarter. However, the full year outcome against our ambitious internal targets will ultimately depend on the traditionally volatile summer months' trading.
"Looking into the next financial year and beyond, we remain very excited about the prospects for the business and about the clear growth ambitions that we set out in February."
