Dunelm Group plc
Trading Update
Dunelm Group plc (“Dunelm” or “the Group”), the UK's leading homewares retailer, is providing an update on current trading.
Revenue
Following a good performance in the first three quarters of the financial year, the Group has recently experienced trading conditions which have been materially more challenging than had been expected, within a soft homewares market. These conditions have impacted our trading performance.
As a result of reduced footfall to stores, LFL store sales are -4.7% in the quarter to date. LFL online sales (Dunelm.com) in the same period are +43.7%, resulting in total LFL sales of +0.1% in the quarter to date. Non LFL online sales (WorldStores, Kiddicare and Achica) have continued to reduce, as expected, partly reflecting the disposal of the Achica business.
Therefore we currently expect total sales for the full year to be in the region of £1,050m, an increase of approximately +10% on the prior year (2017: £955.6m).
Gross Margin
We remain on track to achieve strong gross margin growth from trading in the fourth quarter.
Outlook
Taking into account the trading conditions in the quarter to date and a more cautious outlook for the remainder of the financial year, we currently believe that underlying profits for the year are likely to be moderately below those delivered last year (2017: £109.3m).
Commenting on Dunelm's performance, Nick Wilkinson, Chief Executive, said:
'We have seen an unexpectedly challenging start to the fourth quarter, with continuing softness in the homewares market and reduced footfall to our stores. We are making good progress on our strategic plans to be a truly multi-channel retailer and further strengthen our customer offer. We will learn from recent trading and I remain optimistic about our ability to deliver strong sales and profit growth in the future.'