Dunelm reports "strong" half-year as it gains market share

Dunelm’s total sales surged 13.4% to £340.1m, driven by 10 superstore openings.

The value homewares specialist expects to report pre-tax profit of £59m-£60m in its first half. In the comparable period in 2011 Dunelm made pretax profit of £52.2m.

In its second quarter, which includes the Christmas trading period, like-for-likes jumped 1.6%.

However Dunelm chief executive Nick Wharton cautioned that growth is likely to slow in the second half.

“As we annualise our exceptionally strong comparative performance in the final quarter of last financial year, we anticipate that sales growth in like for like stores will become much harder to achieve in the remainder of the current financial year,” he said.

“Nevertheless, with a significant new store growth opportunity and an exciting multi-channel agenda in place, the Board remains confident in the longer term growth prospects for the business.”

Online improved in the period and now represents 4% of total sales.

Dunelm estimates gross margin for the half year has improved 30 basis points against last year despite the “dampening effect” of its investment in its New Lower Prices campaign. Growth is expected to strengthen throughout the year due to a series of initiatives expected to positively impact gross margin.

Dunelm has committed to opening another six stores, four of which will open in the second half, bringing the store portfolio at year end to 143. Dunelm aims to operate 200 stores across the UK in the medium term.