New figures show
A total of 6 per cent like-for-like sales growth and the continued roll-out of new stores helped Dunelm’s total revenues rise 18.4 per cent to £545m.
However, gross margins, due to increased promotional activity and a quicker turnaround of product lines, have dropped 1.8 percentage points. The shares were broadly flat on the news.
George Salmon, Equity Analyst at Hargreaves Lansdown:
“Dunelm’s top-line growth of 18 per cent is eye-catching. However, this has been boosted by the continued roll-out of new stores and extra discounting. Having more items on sale has got the punters flocking in, but it shouldn’t be forgotten that by dropping prices the group is taking a hit on profit margins.
While we’ll be keeping an eye on margins from here on, it’s hard not to be impressed by the progress made in the last six months or so. The acquisition of Worldstores gives the group greater online exposure, an area it’s clearly looking to leverage.
Nick Wilkinson, the former head of Evans Cycles, will be taking over as CEO with momentum on his side.”
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