Trading Update

RNS Number : 3618P

Dunelm Group plc

25 May 2018

 

25 May 2018

Dunelm Group plc

Trading Update

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, is providing an update on current trading.

Revenue

Following a good performance in the first three quarters of the financial year, the Group has recently experienced trading conditions which have been materially more challenging than had been expected, within a soft homewares market.  These conditions have impacted our trading performance.

As a result of reduced footfall to stores, LFL store sales are -4.7% in the quarter to date. LFL online sales (Dunelm.com) in the same period are +43.7%, resulting in total LFL sales of +0.1% in the quarter to date. Non LFL online sales (WorldStores, Kiddicare and Achica) have continued to reduce, as expected, partly reflecting the disposal of the Achica business.

Therefore we currently expect total sales for the full year to be in the region of £1,050m, an increase of approximately +10% on the prior year (2017: £955.6m).

Gross Margin

We remain on track to achieve strong gross margin growth from trading in the fourth quarter.

Outlook

Taking into account the trading conditions in the quarter to date and a more cautious outlook for the remainder of the financial year, we currently believe that underlying profits for the year are likely to be moderately below those delivered last year (2017: £109.3m).

Commenting on Dunelm's performance, Nick Wilkinson, Chief Executive, said:

'We have seen an unexpectedly challenging start to the fourth quarter, with continuing softness in the homewares market and reduced footfall to our stores.  We are making good progress on our strategic plans to be a truly multi-channel retailer and further strengthen our customer offer.  We will learn from recent trading and I remain optimistic about our ability to deliver strong sales and profit growth in the future.'

Ends

1.   This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR").

For further information please contact:

Dunelm Group plc	0116 2644439
Nick Wilkinson, Chief Executive David Stead, Chief Financial Officer
MHP Communications	020 3128 8789
Tim Rowntree / Simon Hockridge	[e-mail]

Next scheduled events:

Dunelm's Q4 trading update will be on 12 July 2018. The full year results announcement will be on 12 September 2018.

Notes

Notes to Editors

Dunelm was founded in 1979 as a market stall business, selling ready-made curtains. The first shop was opened in Leicester in 1984 and over the following years the business developed into a successful chain of high street shops before expanding, following the opening of the first Dunelm superstore in 1991, into broader homewares categories. Dunelm is now a multi-channel retailer, with Dunelm.com being launched in 2005 and the acquisition of the Worldstores Group accelerating this yet further. Today, around 20% of sales are generated online.  

Dunelm is market leader in the £12bn UK homewares market and active in the £11bn UK furniture market. It currently operates 172 stores, of which 169 are out-of-town superstores and 3 are located on high streets, and online stores, the largest of which can be found at www.dunelm.com, www.worldstores.co.uk and www.kiddicare.com. Dunelm employs approximately 10,000 colleagues and sells around 30,000 product lines in store, increasing to over 100,000 online.

Dunelm, "The Home of Homes", offers a customer proposition of style, value, quality and ease of shopping. From its textiles heritage, in areas such as bedding, curtains, cushions, quilts and pillows, Dunelm has rapidly broadened its product offering to a complete homewares offer including the likes of kitchenware, dining, lighting, seasonal, wall art and rugs. Dunelm is one of the few national retailers to offer an authoritative selection of curtain fabrics on the roll, and owns a specialist UK facility dedicated to producing made-to-measure curtains.

The product range includes many, exclusive, own brand designs and premium brands such as Dorma, Fogarty and Kiddicare. This is augmented by a range of other well-known brands and license agreements.

Dunelm has been listed on the London Stock Exchange since October 2006 (DNLM.L) and has a current market capitalisation of approximately £1.25bn.

 

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