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Dunelm Group plc (LSE:DNLM) , the leading UK homewares retailer, has announced its preliminary results for the 52 weeks ending 29 June 2024. The Group reported a positive performance despite a softer market, driven by strong sales growth, improved market share, and progress in sustainability initiatives.
Strong Sales and Market Performance
Dunelm achieved sales of £1.71 billion for the fiscal year, marking a 4.1% increase from the £1.64 billion reported in FY23. This growth was largely driven by a 6.2% rise in sales volumes. The Group’s market share in the combined homewares and furniture sectors expanded by 60 basis points to 7.7%, reflecting a robust consumer response to its offerings.
The number of active customers grew by 5.1%, with gains observed across all demographics. Both physical stores and online platforms contributed to this growth, with digital sales now accounting for 37% of total sales, up from 36% in FY23.
Expansion and Sustainability Initiatives
Dunelm continued its expansion with the opening of six new stores, including one relocation, and plans to extend its store rollout across various formats. The Group also made notable strides in its sustainability efforts. The “Good and Circular” approach to sustainability saw advancements in reducing Scope 1 carbon intensity, expanding community initiatives such as 'Delivering Joy,' and enhancing diversity among its leadership team.
Financial Highlights
- Gross Margin: The Group reported a strong gross margin of 51.8%, up from 50.1% in FY23, benefiting from net freight tailwinds and operational efficiencies.
- Profit Before Tax (PBT): PBT increased by 6.6% to £205 million, up from £193 million in the previous year.
- Earnings Per Share (EPS): Diluted EPS stood at 74.4p, slightly down from 75.0p in FY23 due to a higher effective tax rate.
- Free Cash Flow: Free cash flow amounted to £132 million, compared to £160 million in FY23, impacted by a higher tax rate and increased capital expenditures.
- Dividends: The final ordinary dividend was increased to 27.5p per share, up from 27.0p in FY23. The total ordinary dividend for the year was 43.5p per share, reflecting a 3.6% rise. A special dividend of 35p per share was also declared with the interim results, bringing the total dividends paid to £158 million for the year.
Outlook
Dunelm anticipates a challenging consumer environment in the near term, with the timing of sector recovery remaining uncertain. However, the Group expects sales growth in FY25 to be driven by volume and further market share gains. Strategic plans include ongoing investments in growth and productivity, focusing on elevating the product offer, reaching more customers, and leveraging operational capabilities.
