TIDMDNLM
RNS Number : 0732A
Dunelm Group plc
18 January 2024
18 January 2024
Dunelm Group plc
Second quarter and first half trading update
Continued sales growth and strong gross margin performance
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading
homewares retailer, updates on trading for the 26-week period ended
30 December 2023.
Q2 Q2 YoY H1 H1 YoY
-----------------
Total sales GBP483m +1.0% GBP872m +4.5%
-------- -------- -------- -------
Digital % total
sales(1) 37% +2ppts 36% +2ppts
-------- -------- -------- -------
(1) Digital includes home delivery, Click & Collect and
tablet-based sales in store
Highlights
-- Strong sales growth in the first half, with total sales
increasing by 4.5% to GBP872m, driven by volume
-- Continued sales growth in Q2 in a challenging market, with
total sales increasing by 1.0% against very strong comparatives
(underlying Q2 growth was 14% last year(2) ) and the digital sales
mix up 2ppts to 37%
-- Increased gross margin by 160bps in the first half, while offering outstanding value
-- Opened three new stores during the second quarter, taking the
total to 183, and remain on track to achieve our full year store
opening plans
-- Our PBT expectations for the full year are in line with
market expectations(3)
(2) Total growth of 18% in Q2 FY23 benefitted from the timing of
our Winter Sale. Underlying growth in Q2 FY23 was 14%
(3) Company compiled consensus average of analysts' expectations
for FY24 PBT is GBP202m , with a range of GBP199m to GBP207m
Continued sales growth against a strong comparative period
We are pleased to report strong sales growth of 4.5% during the
first half, with 1.0% growth delivered in Q2, driven by volume,
against a particularly strong comparative period when sales grew by
14% on an underlying basis. We are confident that we are continuing
to gain share(4) in a market which has been characterised by
volatile week-to-week trading patterns, particularly through Q2,
reflecting the ongoing pressures on consumers' discretionary
spend.
Customers continued to be attracted to the choice and value we
consistently offer across our ranges. We were particularly pleased
with sales in our cook and dine category, which benefitted from
improved ranges as we have developed our product mastery, and
strong sell through of our Christmas products.
(4) We will report market share as usual using GlobalData at our
Interim results in February
Gross margin
We delivered sales growth whilst also achieving significant
improvements in gross margin, evidencing our ability to offer
outstanding value alongside disciplined promotional activity. Gross
margin in H1 was 160bps higher than FY23, benefitting from
improvements in freight rates, which were slightly better than
expected. We expect headwinds in the second half, however we remain
comfortable with our guidance for a year-on-year gross margin
increase of c.100bps.
Strategic and operational update
During the quarter, we made further strategic progress. The
opening of three new stores in Q2 saw us extend our total retail
system to 183 stores, and we have now opened a total of four stores
so far this financial year, in a variety of formats and sizes. We
are delighted by the enthusiastic response from our local
communities to these new stores and are on track with our store
opening plans for the full year.
We also continued with our plans to improve the customer
proposition across our total retail system. We increased choice
through expanding ranges across our categories, and continued to
optimise dunelm.com, which performed well during our busiest
trading weeks, with improvements to both site speed and customer
experience.
We launched our 'Home of Homes' brand platform with our
marketing campaign which ran until November. This Christmas, our
community-focused 'Delivering Joy' initiative continued to go from
strength to strength, with our colleagues and customers donating
over 125,000 gifts to local good causes, twice as many as last
year.
Outlook
Growth in the first half was driven by customer demand for our
consistent, outstanding value proposition. Whilst we are conscious
that the outlook for consumer spending remains unpredictable and
market conditions volatile, we are confident that we can deliver
further market share gains and retain our tight operational grip on
costs. Our expectations for full year PBT are in line with market
expectations(5) .
(5) Company compiled consensus average of analysts' expectations
for FY24 PBT is GBP202m , with a range of GBP199m to GBP207m
Nick Wilkinson, Chief Executive Officer, commented:
"The breadth of our range and outstanding value of our
proposition continues to be well received by customers, resulting
in a strong sales performance for the first half despite a tough
market backdrop.
"Consumers remain under pressure and are actively seeking true
value at all price points. Our customer offer and positioning as
the 'Home of Homes' resonates particularly well in this
environment, and we are confident we have continued to gain market
share. At the same time, our strong operational grip continues to
help us navigate the difficult environment and manage our
margins.
"Supporting our communities remains at the heart of Dunelm and I
would like to thank all our colleagues and customers for making our
recent Delivering Joy campaign our biggest ever, donating an
incredible 125,000 gifts to local good causes during the Christmas
period.
"Looking ahead, we remain excited about the compelling
opportunity for growth for our business. We have continued to
execute at pace on our strategic plans, opening four new stores
over the first half of the year, whilst continuing to expand our
ranges and improve our digital offer. Our new Spring collections
look fantastic in store and are being really well received by
customers as we reach the end of our Winter Sale, leaving us well
placed to make further progress in the months ahead."
For further information please contact:
Dunelm Group plc investorrelations@dunelm.com
Nick Wilkinson, Chief Executive Officer
Karen Witts, Chief Financial Officer
MHP 07595 461 231
Oliver Hughes / Rachel Farrington / Charles Hirst dunelm@mhpgroup.com
Next scheduled event:
Dunelm will make its interim results announcement on 14 February
2024 . There will be an in-person presentation for analysts and
institutional investors in the morning at 9.30am, hosted at Peel
Hunt LLP, 100 Liverpool Street, London, EC2M 2AT, as well as a
webcast and conference call with a facility for Q&A. For
details, please contact christian.harte@mhpgroup.com . A copy of
the presentation will be made available at
https://corporate.dunelm.com
Quarterly analysis:
52 weeks to 29 June 2024
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- --- --- --- ---
Total sales GBP389.6m GBP482.9m GBP872.5m
---------- ---------- ---------- --- --- --- ---
Total sales
growth +9.2% +1.0% +4.5%
---------- ---------- ---------- --- --- --- ---
Digital % total
sales 35% 37% 36%
---------- ---------- ---------- --- --- --- ---
52 weeks to 1 July 2023
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales GBP356.7m GBP478.3m GBP835.0m GBP423.3m GBP380.5m GBP803.8m GBP1,638.8m
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales
growth -8.3% +17.6% +5.0% +6.1% +6.1% +6.1% +5.5%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Digital % total
sales 33% 35% 34% 36% 39% 37% 36%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Notes to Editors
Dunelm is the UK's market leader in homewares with a purpose 'to
help create the joy of truly feeling at home, now and for
generations to come'. Its specialist customer proposition offers
value, quality, choice and style across a growing range of
products, spanning multiple homewares and furniture categories and
including services such as Made to Measure window treatments.
The business was founded in 1979 by the Adderley family,
beginning as a curtains stall on Leicester market before expanding
its store footprint. The business has grown to 183 stores across
the UK and has developed a successful online offer through
dunelm.com which includes home delivery and Click & Collect
options. 152 stores now include Pausa coffee shops, where customers
can enjoy a range of hot and cold food and drinks.
From its textiles heritage in areas such as bedding, curtains,
cushions, quilts and pillows, Dunelm has built a comprehensive
offer as 'The Home of Homes' including furniture, kitchenware,
dining, lighting, outdoor, decoration and DIY. The business
predominantly sells specialist own-brand products sourced from
long-term, committed suppliers.
Dunelm is headquartered in Leicester and employs over 11,000
colleagues. It has been listed on the London Stock Exchange since
October 2006 (DNLM.L) and the business has returned over GBP1bn in
distributions to shareholders in the last ten years(6) .
(6) Ordinary dividends plus special dividends plus special
distributions
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