Dunelm says to top profit forecasts as online growth continues

Dunelm says to top profit forecasts as online growth continues

British home furnishings retailer Dunelm (DNLM.L) said on Wednesday full-year pretax profit would come in slightly above market expectations, as its newly revamped web shopping platform delivered 33% online sales growth in the first half, pushing overall sales almost 6% higher.

Dunelm, which has been outperforming Britain’s troubled retail sector helped by the completion of a troubled consolidation of its WorldStores online business, reported an almost 20% rise in half-year earnings and said it had seen a good start to the third quarter on the back of post-Christmas sales.

Shares in the company, which was founded over 40 years ago and has grown into one of Britain’s largest homeware retailers with more than 170 stores countrywide, rose more than 4% to a record high.

The retailer, which sells furnishings ranging from cushions and bedding to kitchen equipment, also declared a special dividend payment of 8 pence for the year, an increase of 0.5 pence.

“The growth in customer numbers and Dunelm’s digital capabilities means the group is increasing its relevance in the space…Dunelm continues to take share across the spectrum of price points and ranges,” Peel Hunt analysts said.

Dunelm said it had seen another rise in online orders after launching the new website, which was accompanied by a beefing up of its advertising and delivery options.

Total multichannel revenues, including online home delivery, now represents 19.2% of total sales, up from 15.7% a year ago, the London-listed company said.

“The third quarter has started well, with a successful winter sale across the total retail system,” Nick Wilkinson, chief executive officer of Dunelm, said, adding that the company to date has not seen any material disruption to its supply chain or any financial impact due to the Coronavirus outbreak.

Pretax profit rose to 83.6 million pounds ($108.35 million) for the six months ended on December 28, from 70 million in the same period a year ago.

The company had said previously that full-year profit would be higher than its earlier expectations. Analysts in a company-compiled poll on average forecast profit for the full year in a range of 135 million pounds to 137.3 million pounds.