Dunelm says it has been able to lift sales, largely driven by volumes, in recent weeks despite ‘challenging’ conditions in two of its largest markets.
Sales rose by 3% to £435m in the quarter to 30 March, with gross margins increasing by 60bphs.
‘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.
‘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 c110bps year-on-year,’ it says.
It says it expects pre-tax profit for the year to be ‘broadly in line with market expectations’ of £202m.
‘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,’ says Nick Wilkinson, Dunelm ceo.
‘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.’
