Dunelm Q1 sales grow to £388.8m despite ongoing supply issues

Dunelm has revealed its total sales for the 13-week period ending 25 September increased by 8.3% to £388.8m, despite ongoing supply issues.

The growth was mainly driven by the positive customer response to the summer sale in July, improved product availability and some new ranges in the furniture categories.

During the quarter, gross margins decreased by 10bps and was largely offset by a higher mix of full price sales and sourcing gains to balance anticipated cost price increases.

Meanwhile, online sales rose by 20% demonstrating the strength of the group’s “integrated offer”, which provides customers with a digital proposition.

The group said that whilst it has not been “immune” to the supply challenges, it feels “well placed” to manage them with stock across the stores, warehouses and supplier partners currently at a “good” level.

At 25 September 2021, the group said it had net cash of £209m and access to £175m of approved banking facilities which remain unutilised. The previously announced special and FY21 final ordinary dividends, totalling £178m, will also be paid out during the second quarter.

Given the sales boost, the board stated it now expects that FY22 full year pre-tax profits will be in line with analysts’ recently increased consensus expectations.

Nick Wilkinson, CEO, said: “We continue to invest in enhancing our market leading proposition to win more customers who shop more frequently across Dunelm’s expanding range.

“In the current environment, our purpose to help customers create the joy of truly feeling at home feels increasingly relevant and we are excited about our plans to become the 1st choice for home for more UK shoppers.”