Dunelm opens new superstore in Leeds as it reports on strong sales performance

In a trading update, Dunelm said that it secured total sales of £399m in the third quarter, which was "significantly higher" than the same period last year when its store estate was closed to customers and only Click & Collect and home delivery services were available.

The statement added: "Third quarter sales were 40% higher than Q3 FY20, noting that the final three weeks in that quarter were impacted by the beginning of the Covid pandemic. Excluding those final three weeks, total sales for the first 10 weeks of Q3 FY22 were up 31% compared to the same period in FY20.

"Year-to-date total sales were up 37% on a year-on-two-year basis, with continued strong growth in store sales and digital sales being more than double the level of two years ago.

"Customers responded well to our Winter Sale held in the first few weeks of the quarter, with a very strong sales performance across most categories. We have continued to refresh our product ranges, with our new 'Summer Living' products performing particularly well during March, as customers looked to ready their homes and gardens for summer."

"Gross margin in the third quarter increased by 30bps compared to the same period last year, and was better than expected due to a slightly lower proportion of sales from discounted lines during our Winter Sale. We continue to work closely with our committed suppliers to take actions to mitigate significant raw materials and freight cost increases. The outlook remains dynamic, and we continue to monitor gross margins closely.

"Given the robust margin performance in the year to date and the expected impact of the non-like-for-like Summer Sale in the fourth quarter, we anticipate gross margin for the full year FY22 will be broadly similar to FY21."

At 26 March 2022, the group had net debt of £14m after payment of the £75m special dividend announced at the interim results in February. The interim dividend of £28m will be paid during the fourth quarter.

The company's new furniture fulfilment hub in Daventry became fully operational during the quarter and Dunelm said it was pleased with how the site is ramping up its capacity.

The statement added: "We are excited about the opportunities that this new site will unlock for our customer offer, enabling us to accelerate our growth and gain further market share in the furniture category."

"On 1 April we opened a new superstore in Leeds, taking our estate to 176 stores. We expect to open one further new store before the end of the financial year."

Commenting on outlook, Dunelm said: "Whilst the macro-economic outlook remains highly uncertain and there are significant pressures on UK consumers, we remain confident in our market leading proposition and see significant opportunities to continue to grow market share"

Nick Wilkinson, Chief Executive Officer, commented: "It has been another good quarter for Dunelm with sustained growth across all of our homewares categories, particularly as customers ready their homes and gardens for the summer.

"Performance has been strong across all channels and our new facilities for e-commerce and furniture fulfilment are now fully operational, which will enhance our multi-channel proposition, whilst providing the capacity for further growth.

"Whilst the macro environment remains uncertain, with significant headwinds and increasing pressures on the consumer, our wide product range offers choice for every budget, whether replacing everyday essential items or refreshing a room in your home. The resilience of the Dunelm business model and the ability of our colleagues to adapt quickly to changing circumstances give us confidence in our plans and we remain well placed to continue to grow market share."