Dunelm reports that total sales increased by +3% to £435m in Q3 (the 13 weeks ended 30th March 2024), driven by volume, despite "challenging" homewares and furniture markets. It says that March, in particular, saw softer levels of demand.
The retailer enjoyed growth in both store and digital channels, and in gross margin. "As expected, the rate of YoY improvement is slowing as we begin to lap the benefit of lower freight costs, whilst foreign exchange movements remain a headwind. We are managing the ongoing impact of Red Sea surcharges, and despite this, we now expect full year gross margin to be ahead of previous guidance and to increase by c.110bps YoY," states Dunelm.
"We are continuing to make good progress building the ‘Home of Homes’ by strengthening our customer offer, extending and digitalising our total retail system and evolving our marketing ecosystem.
"We have successfully launched our spring/summer product ranges alongside our latest brand marketing campaign, which extends our brand platform by positioning Dunelm as the place to go for all of our customers’ home needs. We expect the television campaign to be viewed over 200 million times, with further exposure across radio, social, and other digital channels.
"We remain on track to hit our store openings target for FY24, with four new stores open to date and a further two (including one relocation) planned to open by the end of the year. We have also continued to develop our digital customer proposition, now offering further flexibility on customer delivery options and multichannel giftcards."
The retailer says it currently expects FY24 PBT to be broadly in line with market expectations.
CEO Nick Wilkinson comments: “We have delivered a resilient performance in Q3, with continued volume-based sales growth through a period of more challenging and volatile market conditions. Whilst discretionary spend remains under pressure, our relevant and attractive product offer continues to resonate with customers as they shop across our broad ranges to find quality and value for all areas of the home.
“This performance reflects our deep-rooted understanding of our customers and the effectiveness of a total retail system which continues to drive growth across store and digital channels, bringing further market share gains. At the same time, our operational grip continues to mitigate ongoing cost headwinds and has supported a strong gross margin performance.
“Looking ahead, we are excited about strengthening our customer offer, and the breadth of growth opportunities this presents. Consumer behaviour continues to be difficult to predict, however we remain confident in our ability to navigate current conditions whilst delivering further sustainable growth and market share gains.”
