However, analysts will be alert to any note of caution struck by the store group about the coming year, because the retailer is one of the few the City has remained bullish about as trading conditions have toughened.
Analysts have been attracted to Dunelm’s niche market positioning, low-ticket products and low-cost business model.
Dunelm posted like-for-like sales growth of 4.9 per cent for the 26 weeks to December 29, 2007.
Arden Partners analyst Louise Richardson expected Dunelm’s results to be good, but said such positive comparable store sales numbers would be difficult to sustain in a tough market.
“We’re expecting like-for-like growth to be between 1 and 2 per cent [since the last reported period] and this still shows steady growth, ahead of many other retailers,” she said.
Richardson added that Dunelm remains on track with its opening programme and is well-positioned, in that it has no direct competitor. She said like-for-likes would probably be flat for the rest of the year, which would still be better than the prospects for rival retailers.
“There are many other retailers selling homewares, but none that really take market share from Dunelm, as it is a unique proposition,” she said.
“If Tesco starts upping its range of homewares in the new department stores that it is opening, that will have an effect on Dunelm, but it will remain a specialist. The retailer also has a cautious management, which is very sensible in this climate.”
Citi also expects flat like-for-likes in the second half.
Dunelm reported total sales of£197.4 million for the 26 weeks to December 29. In that period, it opened stores in Aberdeen, Shoreham, Peterborough, Eastbourne and Dumfries. It has 73 superstores and a target of 150.
No comments yet