Dunelm has raised its profit outlook as it reports robust growth in the fourth quarter.
Dunelm has updated on trading for Q4 ending 1 July 2023 and the full year. In Q4, the retailer saw sales growth of 6% and total sales of £381m. Digital sales made up 39% of total sales in the quarter, 2ppts higher than FY22.
During Q4, customers were able to take advantage of offers in the summer sale and prices were reduced on over 1000 lines and Dunelm saw particularly strong volume growth.
For the full year, total sales were £1,639m, 6% higher than FY22 on a comparable basis. Compared to FY19, total sales are almost 50% higher and digital sales now make up 36% of total sales, compared to 20% in 2019.
Gross margin for the full year is expected to be in line with the guidance of c.50%. Dunelm expects profit before tax for the full year to be slightly ahead of current analysts’ consensus of £188m. This performance reflects continued robust sales performance, strong commercial disciplines and tight operational grip on costs.
Looking ahead, Dunelm says it sees very significant headroom to deliver further profitable growth, seizing the opportunity to raise the bar further on its customer offer. The company will continue to invest in digitalising and developing the business. Its next new store in South East London – the 180th – will open soon.
Nick Wilkinson, ceo, commented: “The breadth and relevance of our product offer has continued to resonate with our home-loving customers over the last quarter of the year. This has been reflected in our strong financial performance despite the challenging broader consumer backdrop.
“Against this backdrop, our commitment to value is stronger than ever. During the quarter we lowered prices on over 1,000 lines, and our customers were also able to take advantage of great offers in our summer sale.
“We have a strong business model, with committed colleagues and suppliers, who strive every day to improve our customer proposition. We continue to focus on further strengthening our product mastery, developing our stores, enhancing our digital channels, and building out our marketing ecosystem, in order to create an even better experience for our customers. With these improvements to our customer proposition and business capabilities we see a compelling opportunity for sustainable and profitable growth and are confident about the future.”
