Dunelm shares climb on stronger sales outlook despite website closures
Furniture firm Dunelm saw revenue grow by two per cent over the Christmas quarter after closing two struggling websites.
The retailer earned £303.6m for the three months to the end of December, £6m more than the year before, while like-for-like sales rose nine per cent to £282.5m.
Like-for-like store sales grew almost six per cent year on year over the quarter, while Dunelm’s online sales were 38 per cent higher than the same period in 2017.
However, a 9.6 per cent increase in sales for the Dunelm brand was offset by big drops at websites Worldstores.co.uk, Kiddicare.com and Achica.com, which fell by £20.6m over the quarter since their closure last year.
Worldstores had seen lower returns since Dunelm bought its rival back in 2016, leading to the closure.
Shares at Dunelm surged upwards by more than 11 per cent in early trading today following the update, which predicted profit before tax of £70m for the first half of the year, despite a £3.8m impairment charge after the Fogarty brand went into administration in October.
Dunelm chief executive Nick Wilkinson welcomed the update, saying: “By focusing back on our core business, under one Dunelm brand, we are improving our trading and financial performance.”
But he added that the company remains cautious on its second half outlooks due to “the ongoing uncertainty in the UK economy” around Brexit.
“However, in the medium term, we see significant opportunity to grow the business by focusing on our customers and seizing opportunities in a digital world,” Wilkinson said.