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Interim Results

Dunelm increases market share in challenging environment

08 February 2017 07:19

Homewares retailer Dunelm Group increased its market share in the 26 weeks to the end of December although trading was slightly softer than expected due to a weaker market and some short term supply chain disruption.

The first half saw total sales increase 2.8%, while like-for-like sales decreased by 1.6%.

Dunelm said unusually warm weather in the first quarter reduced store footfall.

Dunelm said the second quarter saw an improvement in performance in its stores and customers responded very well to its enhanced seasonal product lines, especially its new Christmas offer.

Sales totalled £460.5m - £452.4m excluding Worldstores - compared with £448.1m last time.

Like-for-like sales totalled £423.1m - down from £430.0m.

Profit before tax excluding exceptional items reduced by 13.6% to £65.2m, impacted by the lower like-for-like sales and increased investment in strategic projects, especially in IT and marketing, together with the transition costs incurred with the opening of a new distribution centre in Stoke.

The group also incurred an exceptional cost of £9.3m, associated with the acquisition of Worldstores.

Chief executive John Browett said: "We are in a transitional year for Dunelm and it has been a particularly busy first half - whilst we are operating in a challenging retail environment, especially in homewares, we remain focused on investing in and developing our business for the future.

"We are still in the midst of this exciting journey, and whilst trading was slightly softer than we would have liked due to a weaker market, we continue to increase our share and are confident that we will emerge as an even stronger market leader.

"We remain committed to our long term plans for the business, with our three-part growth strategy at the centre of everything we do. We have opened five new stores in the period and have more openings and refits planned in the second half.

"Our home delivery channel continues to perform well and our acquisition of Worldstores will accelerate our online capabilities and growth potential.

"We have significant opportunities to improve performance through various initiatives and will continue to invest.

"Dunelm's business model remains one that is hard to replicate, and we continue to generate significant levels of cash for shareholders, allowing a further increase in the dividend."

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