Dunelm profits set to land at lower end of expectations amid ‘uncertain backdrop’
Dunelm has said that its profits are set to land at the lower end of expectations amid what the company described as an “uncertain backdrop” for customers and businesses.
The home furnishings retailer announced that its sales had grown 2.1 per cent in the 13 weeks to 28 March, a 2.1 per cent increase year-on-year.
But it warned that it now expects full-year pre-tax profits to land at the “lower end” of consensus expectations, which currently sees the firm posting between £210m and £217m.
Clo Moriarty, Dunelm CEO, said: "We saw further sales growth in Q3 (third quarter), against an uncertain backdrop for both customers and businesses. Although the external environment is not helpful in the short term, we continue to focus on the areas within our control – strengthening our proposition while operating efficiently and effectively.”
Dunelm said the Middle East conflict had also had a minor impact on its costs.
The firm said in a statement: “Through our ongoing delivery of productivities and a disciplined approach to investments, we are navigating the impact of instability in the Middle East, which is expected to only have a small direct cost impact in this financial year.”
Dunelm said its third quarter had “started well”, with growth in line with that seen in the first half. This came after the company saw a “good” winter sale period and a “positive response” to its spring ranges.
But the company had more recently experienced a period of “broad-based softening”, adding: “Whilst we continue to benefit from the FX (foreign exchange) tailwind seen in the first half, we also saw customers seeking value, buying into more discounted products compared to full price lines.”
In the year-to-date, Dunelm saw its total sales lift 3.1 per cent above last year to £1.4bn.
On the company’s plans, Ms Moriarty said: “We are making good progress building our long‑term growth plans with some exciting developments beginning to emerge, including a much stronger store opening pipeline and some encouraging early results from our recently launched app.
"Our final quarter provides multiple opportunities for Dunelm to stay front of mind for customers, including our popular summer sale. We remain confident that our comprehensive offer will continue to resonate with homelovers."
Ms Moriarty, former chief retail and technology officer at Sainsbury’s, took up the role of CEO last October.
She previously said: "I've been struck by the magic that has turned this very special business from a market stall into a market leader.”