Dunelm: Retailer overcomes 'more difficult' conditions to notch up higher half-year profits

This came despite a sharp slowdown in sales growth to 1 per cent in the final three months of 2023 compared with a year earlier, when sales had surged by 17.6 per cent.

Dunelm said it is “pleased” with trading in 2024 so far thanks to a resilient customer base, but warned that the consumer outlook remains “uncertain”.

Leicester-headquartered Dunelm said recent improvements in profit margins will slow over its second half as it flagged that shipping costs are rising again, as well as a drag from currency movements.

The group said: “We are managing the impact of ships taking longer, more costly routes as they avoid the Red Sea area.”

It added: “We have a tight grip on operating costs and were therefore able to partially offset some of the inflationary increases and investment through productivity and efficiency initiatives.”

Nick Wilkinson, Chief Executive Officer, commented: “In the past six months we have kept our customers front of mind, ensuring our broad offer has value at its core whilst also expanding our ranges, introducing new styles, and improving the experience across our store and digital channels.

“This has been particularly important in a more difficult trading environment and has resulted in another strong sales performance combined with market share gains.

"Despite ongoing pressures on consumers, we are encouraged by the wide variety of new customers shopping with Dunelm, and existing shoppers also coming back more frequently.

"Alongside the positive sales performance we have delivered a very strong gross margin, which is testament to our tight operational control and the inherent strength of our business model.

“As we move towards Spring and customers look to freshen up their homes, our specialist proposition continues to resonate strongly and, in a dynamic retail environment, we are relentlessly focused on evolving and investing in our business to ensure we remain relevant to further increase our broad appeal.

"We have never been more excited about our future as we build trust in our offer and identity as the Home of Homes.”

The firm, which employs more than 11,000 staff, said it is on track for full-year profit expectations of £202m in 2023-24.

The business was founded in 1979 by the Adderley family, who opened a curtains stall on Leicester market before establishing a chain of stores.

The business has grown to around 180 stores across the UK and it has also developed an online service through dunelm.com which includes home delivery and click and collect options.

The business predominantly sells specialist own-brand products sourced from long-term suppliers.

It has been listed on the London Stock Exchange since October 2006.