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Highlights
- Strong Sales Performance: Dunelm achieves 2.4% sales growth to £894 million in H1 FY25, with a 1.6% increase in Q2 amidst a challenging market.
- Strategic Progress: The company made notable strides in enhancing its online experience, expanding its store network, and acquiring new locations, including its first store in inner London and 13 small stores in Ireland.
- Profit Outlook: Dunelm expects full-year PBT to meet market expectations despite ongoing cost pressures and a tough market environment.
Dunelm Group plc (LSE:DNLM), the UK’s leading homewares retailer, has released its trading update for the 13-week period ending 28 December 2024, along with its first-half performance. The company has posted solid growth in both sales and volume, demonstrating resilience in a challenging retail landscape.
For the first half of FY25, Dunelm achieved a 2.4% increase in sales, reaching £894 million. In Q2, the company saw a more modest growth of 1.6%, reflecting the pressures faced by the broader market. Despite these challenges, Dunelm’s digital participation rose by 3 percentage points to 40%, highlighting the company’s ongoing success in adapting to the growing trend of online shopping.
The company also managed to improve its gross margin by 10 basis points year-on-year in H1, driven by strong operational management and a focus on delivering exceptional customer value despite rising input costs.
Strategic Investments and Store Expansions
Dunelm has made significant progress in its strategic initiatives, which are crucial for long-term growth. The company enhanced its online customer experience and made further inroads into new markets. Notably, it opened its first store in inner London and acquired 13 small stores in Ireland, expanding its footprint and broadening its customer base.
Additionally, Dunelm anticipates the opening of five new superstores in the second half of FY25, further strengthening its presence in the UK homewares market.
Profit Expectations and Outlook
Despite the challenging economic environment and ongoing cost pressures faced by the retail sector, Dunelm remains optimistic about its full-year performance. The company expects its profit before tax (PBT) for FY25 to be within the range of market expectations.
Looking ahead, Dunelm is confident that the current market conditions, while challenging, provide ample opportunities to enhance its customer proposition and increase market share. The company aims to achieve a 10% market share in the medium term, positioning itself for continued growth in the UK homewares market.
