Things are on the up for homewares chain Dunelm, following a “particularly strong” three months with sales rising on the back of new store openings and online growth.
The Leicestershire-headquartered chain – market leader in the £13 billion 海角视频 homewares market – said total sales were up 7.5 per cent for the three months to September 28, at £262.6 million.
Like-for-like sales (which ignore extra revenues created by newly opened stores) increased by 6.4 per cent to £255.6 million.
Dunelm said it had delivered gains in market share against a “weak” comparative period in 2018.
However, shares in the company sank in early trading after it warned that trading in September was “mixed” due to a “softer homeware market”.
The business currently operates 170 superstores, most of them out-of-town. It employs around 10,000 staff.
The Syston-based business reported a jump in online sales and said the launch of its new digital platform will be an “important milestone” in its development.
Online sales increased by more than a third to £35.7 million for the period, while like-for-like store sales increased by 2.9 per cent to £219.9 million.
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Chief executive Nick Wilkinson said: “We are pleased with our performance in the first quarter, building on the strong growth delivered over the last year.
“Our customers continue to respond well to our specialist product and service offering and we are excited by the numerous opportunities ahead of us.
“Despite the recent softness in the homeware market and the increased political uncertainty, we are confident we can continue to win market share and our expectations for the full year remain unchanged.”
Shares in the company were down around 6 per cent to 765p on Thursday morning.
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Russ Mould, investment director at online trader AJ Bell said: “Dunelm’s first quarter trading update didn’t receive the kind of reception management may have expected.
“The home furnishings chain defied retail gloom to post a series of positive trading updates earlier in 2019 but the stalling share price suggests the strong performance has already been priced in by the market.
“And growth is slowing; sales were up more than 10 per cent on a like-for-like basis in the 12 months to June 29 as management’s strategy of improving the customer experience, boosting its core brand and improving its online platform paid off.
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“However the latest quarter showed like-for-like growth of 6.4 per cent, which would still be the envy of many retailers, but arguably not enough to sustain the excitement behind the Dunelm story.
“And the quarter itself was a game of two halves with a strong start undermined by a weaker September as the increasingly uncertain backdrop started to bite.
“In many ways 2019 was set up to be a good year for Dunelm, with plenty of room to improve on a poor showing in 2018 linked to the integration of its 2016 acquisition of WS Group.
“Now the easy wins have been achieved, CEO Nick Wilkinson faces the task of steering the group through what could be an increasingly testing period.”