Dunelm grows revenue but remains cautious on outlook

Revenue grew 18.2% to £492.8m.

Chief executive Will Adderley remained cautious on the outlook: “We do not anticipate that it will be possible to maintain last year’s rate of like-for-like sales growth in the coming 12 months as consumer spending has to absorb tax increases, public sector cuts and, potentially, interest rate rises.

“We also think it will be hard to achieve further gross margin gains, with uncertainty over sterling and recent increases in freight costs affecting imported products.”

The homewares retailer said that like-for-like growth was “marginally negative” in the final 10 weeks, “reflecting strong comparatives in the prior year”.

The retailer added that the sales growth was affected by a shift in Dunelm’s accounting calendar, meaning more of the winter sale fell in the first half than in previous years. Adjusting for this effect, like-for-like growth would have been around two percentage points lower in the first half, and two percentage points higher in the second.

Gross margin is expected to increase 190 basis points over the year, due to successful management of old stock.

Dunelm trades from 94 superstores and 10 high street stores. The retailer plans for up to 200 superstores in total.

Dunelm will move into a new head office in autumn 2011, to house the extra staff it requires to grow.

Adderley added: “We are pleased with our trading performance over the last financial year. We remain as determined as ever to keep offering ‘simply value for money’ to more and more customers across the UK.”

Adderley highlighted its improved furniture and storage departments, the roll out of its arts & crafts section, and the pilot of its new kitchen department, as well as the Dunelm giftcard.

He added: “We continue to see opportunities both to improve our offer and to extend our footprint further in the UK. We look forward to another period of strong space growth.”

Dunelm will reveal its preliminary results September 16.