Dunelm margins improve as like-for-likes grow 1.1%

The value homewares retailer said like-for-likes improved in the second quarter, when they were up 3.8% “in part reflecting the more difficult trading environment in the weeks immediately preceding Christmas 2010, when snow was estimated to have dampened sales over the quarter”.

Total sales jumped 8.8% to £299.9m in the half as the retailer continued to open its super stores. 11 opened in the period, taking its total to 113. It is targeting 150-200 superstores in the UK.

Gross margin is estimated to have improved 10 basis points in the half. It expects full year gross margin to be “broadly in line with the prior year”.

Dunelm chief executive Nick Wharton said: “Dunelm has achieved robust trading results in a very demanding retail environment, and has continued to gain market share on a like for like basis.

“We have also made significant progress on our longer term development plan, not only delivering a very ambitious store opening programme over the last quarter, but also making fundamental improvements to our on-line offer that have been well received by customers.

“The combination of satisfactory trading and a disciplined approach to operating costs means that the Board anticipates that profit before tax for the half year will be approximately £52m.

 “We remain cautious about the impact of the UK consumer environment on our trading in the near term. Nevertheless, with eight further store openings already committed, and with our “Simply Value for Money” proposition resonating with a wide range of customers, we remain confident in the future growth prospects for the business.”

 Dunelm will reveal its interim results on February 8.