Dunelm like-for-likes slip in ‘volatile’ environment

Like-for-like sales, combining stores and home delivery, declined 2.2% in Dunelm’s third quarter, which chief executive John Browett put down to “trading in a volatile retail environment”.

Total sales in the 12 weeks to April 1, excluding its recent acquisition of Kiddicare-owner Worldstores, edged up 1% to £231m.

Including the acquisition, group sales rose 11.4% to £255m.

Dunelm has continued to drive its online business with home delivery sales jumping 21% in the quarter.

It has “considerably improved” its supply chain with the opening of a new warehouse and the consolidation of transport suppliers.

The retailer also opened two new stores during the period, taking its footprint to 159 units.

Market in decline

While the homewares market remains in decline, Browett said Dunelm has “continued to outperform the homewares market” and enhanced its position as market leader.

“As a result, our expectations for the full year remain unchanged,” he said.

The market decline began in Dunelm’s fourth quarter last year, almost a year ago.

The retailer added that, with Easter being later this year, it expects around 1.5% of like-for-like sales to move from the third to the fourth quarter.

Worldstores

Dunlem said that its integration of Worldstores is “going well” with performance in line with expectations.

It predicts the business will “at least break-even” in Dunelm’s financial year ending June 30 2018.

The former Apple exec said: “We remain excited by the acquisition of Worldstores. The business has stabilised and our integration plans are developing well.

“Our home delivery channel goes from strength to strength and will be enhanced by the significant benefits that the acquisition provides to our product range, including the Kiddicare brand, delivery, and speed of IT development.”

Dunelm suffered a 26% slump in pre-tax profit in its first half, as a “weaker market” and ongoing investment dented earnings.