Dunelm reports sales growth amid challenging market

LONDON - Dunelm Group plc, the UK's top homewares retailer, disclosed a 3.5% increase in total sales reaching £403 million for the 13-week period ending on September 28, 2024. The company's digital sales also saw a rise, now accounting for 37% of total sales, marking a 2 percentage point increase from the previous year.

The growth in sales volume comes despite the ongoing volatile trading conditions and is seen as an indicator of market share gains for Dunelm. The retailer attributes its performance to the broad appeal of its product categories, highlighting the success of its sofa collections and bedding. Additionally, Dunelm's largest student campaign to date has reportedly attracted a younger demographic.

In terms of gross margin, Dunelm reported a year-on-year increase of 20 basis points, with expectations for the fiscal year 2025 gross margin to remain between 51% and 52%. The company has also made strides in its strategic initiatives, including the expansion of its made-to-measure capabilities and the planned opening of its first inner London store at Westfield London before the year's end. This is part of Dunelm's strategy to open five to ten new superstores annually, varying in size.

The retailer has also enhanced its digital shopping experience by implementing an AI-driven product discovery feature in collaboration with Google (NASDAQ:GOOGL ). This improvement is in line with their commitment to connect with more customers and elevate their product offerings.

Operational advancements include an improved Click & Collect service, with over half of the items on Dunelm's website now available for in-store collection. This has reportedly led to additional in-store purchases by customers who visit for collections.

Nick Wilkinson, CEO of Dunelm, expressed satisfaction with the company's first-quarter performance and optimism about its strategic progress. He emphasized the company's focus on remaining relevant to customers and confident in reaching a 10% market share milestone in the medium term.

The information for this report is based on a press release statement from Dunelm Group plc.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Source: Investing.com