REG - Dunelm Group plc - First quarter trading update

DunelmAnnouncement

19/10/2023 07:00

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RNS Number : 5935Q  Dunelm Group plc  19 October 2023

 

 

19 October 2023

Dunelm Group plc

 

First quarter trading update

 

Strong sales growth with margin improvement consistent with guidance

 

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares
retailer, updates on trading for the 13-week period ended 30 September 2023.

 

                           Q1      YoY
 Total sales               £390m   +9%
 Digital % total sales(1)  35%     +2ppts

( )

(1) Digital includes home delivery, Click & Collect and tablet-based sales
in store

 

 

Highlights

·    Strong sales performance, with total sales increasing by 9% to £390m

·    On track with our accelerated store roll-out plan of five to ten
stores per year for the next two years, with one new store opened in Q1 and a
further three expected to open before the end of Q2

·    Continuing to offer customers outstanding value while increasing
gross margin by 120bps

 

Delivery against our plans driving strong sales growth

We are pleased to report another strong period of growth in the first quarter,
with total sales increasing by 9% to £390m, largely driven by volume. Both
our stores and digital channels performed well, with the contribution from
digital sales up 2ppts year-on-year to 35%.

 

As a long-standing specialist with deep product mastery, in a complex consumer
environment we were able to carefully manage gross margin whilst continuing to
focus on offering outstanding value to our customers.

 

Growth was broad based across our categories with our new autumn/winter
ranges, including new collaborations with Disney and the Natural History
Museum, resonating well by offering colour and personality to help customers
find joy as they enhance their homes. Our upholstery ranges also performed
strongly, with good growth in sofas and sofa beds, where we have added new
shapes and colours to our best selling ranges.

 

Gross margin

We benefited from a net tailwind from freight and foreign exchange rates
whilst continuing to offer outstanding value to our customers. We delivered
growth in sales volume while improving gross margin by 120bps, consistent with
our full year guidance for gross margin to increase by c.100bps year-on-year.

 

Summary and outlook

We continue to focus on making every pound count, for both our customers and
our business, and we are making good progress against the plans we set out in
our results announcement in September.

 

We are seizing the opportunity to amplify our brand and extend our reach, with
our new 'Home of Homes' brand marketing campaign, which launched at the end of
September. This is our biggest and widest reaching campaign to date, taking
the brand to new audiences and showcasing the breadth of our homewares
offering.

 

We continued to strengthen our customer offer, with convenient five-day lead
times on most of our upholstery ranges, improving availability in categories
such as cabinet furniture and introducing conscious choice options into our
Christmas baubles ranges. We also introduced exciting new lines, such as live
plants and personalised products.

 

We are seizing the opportunity to extend and digitalise our total retail
system. With one new store opened during the quarter and a further three
stores expected to open before the end of Q2, we are on track to achieve our
full year target of five to ten new store openings (including relocations).

 

Whilst the UK economy and consumer outlook remain relatively uncertain, we are
well placed to deliver ongoing sustainable growth as consumers continue to
enjoy the outstanding value proposition for which we are known.

 

Nick Wilkinson, Chief Executive Officer, commented:

"Our proposition, which offers an increasingly wide range of homewares
products, continues to prove popular with customers, as we delivered another
strong sales performance in Q1. We continue to have a laser focus on
outstanding value, and customers can now find even more choice with the
introduction of new ranges such as live plants.

"We are reaching more and more UK consumers through our expanding store
estate, and our latest marketing campaign, which is our biggest to date,
showcases the breadth of the Dunelm offer, reinforcing our position as 'The
Home of Homes'.

"There remains a significant opportunity for Dunelm to take further market
share and we are excited about the progress we are making against our plans,
through targeted and thoughtful investment, in order to seize the compelling
opportunities ahead of us. We remain very confident about our prospects for
continuing to drive sustainable growth."

 

 

 

 

 

 

For further information please contact:

 Dunelm Group plc                                   investorrelations@dunelm.com
 Nick Wilkinson, Chief Executive Officer

 Karen Witts, Chief Financial Officer
 MHP                                                07595 461 231
 Oliver Hughes / Rachel Farrington / Charles Hirst  dunelm@mhpgroup.com (mailto:dunelm@mhpgroup.com)

Next scheduled event:

Dunelm will release its second quarter trading update on 18 January 2024.

Quarterly analysis:

                        52 weeks to 29 June 2024
                        Q1        Q2    H1    Q3    Q4    H2    FY
 Total sales            £389.6m
 Total sales growth     +9.2%
 Digital % total sales  35%

 

                        52 weeks to 1 July 2023
                        Q1        Q2        H1        Q3        Q4        H2        FY
 Total sales            £356.7m   £478.3m   £835.0m   £423.3m   £380.5m   £803.8m   £1,638.8m
 Total sales growth     -8.3%     +17.6%    +5.0%     +6.1%     +6.1%     +6.1%     +5.5%
 Digital % total sales  33%       35%       34%       36%       39%       37%       36%

 

Notes to Editors

Dunelm is the UK's market leader in homewares with a purpose 'to help
create the joy of truly feeling at home, now and for generations to come'. Its
specialist customer proposition offers value, quality, choice and style across
an extensive range of c.75,000 products, spanning multiple homewares and
furniture categories and including services such as Made to Measure window
treatments.

 

The business was founded in 1979 by the Adderley family, beginning as a
curtains stall on Leicester market before expanding its store footprint. The
business has grown to 180 stores across the UK and has developed a successful
online offer through dunelm.com which includes home delivery and Click &
Collect options. 152 stores now include Pausa coffee shops, where customers
can enjoy a range of hot and cold food and drinks.

 

From its textiles heritage in areas such as bedding, curtains, cushions,
quilts and pillows, Dunelm has built a comprehensive offer as 'The Home of
Homes' including furniture, kitchenware, dining, lighting, outdoor, decoration
and DIY. The business predominantly sells specialist own-brand products
sourced from long-term, committed suppliers.

 

Dunelm is headquartered in Leicester and employs over 11,000 colleagues. It
has been listed on the London Stock Exchange since October 2006 (DNLM.L)
and the business has returned over £1bn in distributions to shareholders in
the last ten years(2).

 

(2) Ordinary dividends plus special dividends plus special distributions.

 

 

 

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