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10 Apr 2019 | 07:28

Dunelm Group upgrades outlook on profits as margins boosted by positive homewares market

Homewares retailer Dunelm Group upgraded its outlook on profits after margins were bolstered by the closure of its Worldstores businesses and a positive homewares market. If there are no significant changes to current trends in consumer demand, Dunelm said it expected to report full year profit before tax slightly ahead of the top of the range of current analysts' forecasts of between £114m and £118m. For the 13-week period ended 30 March 2019, like-for-like store sales grew 12.5% and online revenue jumped 32.1%. Total multi-channel revenue for the quarter -- defined as like-for-like online revenue plus reserve & collect and tablet-based selling in-store -- represented 18.5% of revenue, an increase of 4.1% year on year. Gross margin increased by approximately 90 basis points for the quarter, driven by improvement the positive impact of closing the dilutive Worldstores businesses and an increase in the core business margin of approximately 40 basis points amid improved sourcing. 'As a result of improved financial performance, we expect full year performance incentives would pay out at a higher level across the business,' the retailer said. 'These factors would result in the second half operating cost to sales ratio being slightly higher than the same period last year.'

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