18 April
2024
Dunelm Group
plc
Third quarter trading
update
Continued sales growth,
driven by volume
Dunelm Group plc ("Dunelm" or "the
Group"), the UK's leading homewares retailer, updates on trading
for the 13-week period ended 30 March 2024.
|
Q3
|
Year-to-date
|
FY24
|
YoY
|
FY24
|
YoY
|
Total sales
|
£435m
|
+3%
|
£1,307m
|
+4%
|
Digital % total sales1
|
37%
|
+1ppts
|
36%
|
+1ppts
|
1 Digital includes home delivery, Click & Collect
and tablet-based sales in store
Highlights
·
Total sales in Q3 increased by 3% to £435m, driven
by volume
·
Growth in both store and digital channels, with
digital sales participation up 1ppt to 37%
·
Increased gross margin by 60bps year-on-year,
maintaining strong operational grip while continuing to offer
outstanding value
·
Full year gross margin now expected to expand by
c.110bps year-on-year
·
Continued to strengthen our customer offer as the
'Home of Homes'
·
Despite a challenging sales environment, we
currently expect FY24 PBT to be broadly in line with market
expectations2
2 Company
compiled consensus average of analysts' expectations for FY24 PBT
is £202m, with
a range of £200m to £205m
Continuing to deliver sales growth in an uncertain
market
Total sales increased by 3% to
£435m, despite both the homewares and furniture markets remaining
challenging. As has been widely reported, trading conditions have
continued to be volatile with March in particular seeing softer
levels of demand. However against this backdrop, our offer
continues to resonate with customers and our volume-driven sales
performance is underpinned by growth across both store and digital
channels. We therefore believe we have continued to gain further
market share in the period.
The mix of digital sales increased
by 1ppt reflecting the ongoing improvements we are making to our
online customer proposition, such as improving the speed of the
website.
Gross margin
Gross margin remained strong and increased by
60bps in the quarter. As expected, the rate of year-on-year
improvement is slowing as we begin to lap the benefit of lower
freight costs, whilst foreign exchange movements remain a headwind.
We are managing the ongoing impact of Red Sea surcharges, and
despite this, we now expect full year gross margin to
be ahead of previous guidance and to increase by c.110bps
year-on-year.
Strategic and operational update
We are continuing to make good progress
building the 'Home of Homes' by strengthening our customer offer,
extending and digitalising our total retail system and evolving our
marketing ecosystem. We have successfully launched our spring /
summer product ranges alongside our latest brand marketing
campaign, which extends our brand platform by positioning Dunelm as
the place to go for all of our customers' home needs. We expect the
television campaign to be viewed over 200 million times, with
further exposure across radio, social, and other digital
channels.
We remain on track to hit our store openings
target for FY24, with four new stores open to date and a further
two (including one relocation) planned to open by the end of the
year. We have also continued to develop our digital customer
proposition, now offering further flexibility on customer delivery
options and multi-channel giftcards.
We are continuing to apply our usual
operational grip, including managing the impact of Red Sea
disruption. Our availability has remained generally strong,
benefitting from our committed supplier model, which along with the
breadth of our ranges, has meant that sales have been largely
unaffected to date.
Outlook
We have continued to deliver sales growth in a
challenging market, whilst improving our gross margin. While there
are signs that the outlook for UK consumers may be easing in some
areas, it remains difficult to predict when this might translate
into better conditions in our markets. Despite the trading
environment, we currently expect FY24 PBT
to be broadly in line with market
expectations3.
Our commitment to developing and investing in
our customer proposition leaves us well positioned and gives us
confidence in our ability to gain further market share. We remain
excited about the future opportunity for Dunelm and confident that
we have the right strategy in place to develop our business for the
long term.
3 Company compiled consensus average of analysts' expectations
for FY24 PBT is £202m, with a range
of £200m to £205m
Nick
Wilkinson, Chief Executive Officer, commented:
"We have delivered a resilient
performance in Q3, with continued volume-based sales growth through
a period of more challenging and volatile market conditions. Whilst
discretionary spend remains under pressure, our relevant and
attractive product offer continues to resonate with customers as
they shop across our broad ranges to find quality and value for all
areas of the home.
"This performance reflects our
deep-rooted understanding of our customers and the effectiveness of
a total retail system which continues to drive growth across store
and digital channels, bringing further market share gains. At the
same time, our operational grip continues to mitigate ongoing cost
headwinds and has supported a strong gross margin
performance.
"Looking ahead, we are excited about
strengthening our customer offer, and the breadth of growth
opportunities this presents. Consumer behaviour continues to be
difficult to predict, however we remain confident in our ability to
navigate current conditions whilst delivering further sustainable
growth and market share gains."
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
|
Next scheduled
event:
Dunelm will
release its fourth quarter trading update
on 18 July 2024.
Quarterly
analysis:
|
52 weeks to 29 June
2024
|
|
Q1
|
Q2
|
H1
|
Q3
|
Q4
|
H2
|
FY
|
Total sales
|
£389.6m
|
£482.9m
|
£872.5m
|
£434.5m
|
|
|
|
Total sales growth
|
+9.2%
|
+1.0%
|
+4.5%
|
+2.6%
|
|
|
|
Digital % total sales
|
35%
|
37%
|
36%
|
37%
|
|
|
|
|
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 a growing range of
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 183 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 years4.
4 Ordinary dividends plus special dividends plus special
distributions