# Dunelm Group reports another strong period of growth in the first quarter

- Link: https://www.directorstalkinterviews.com/dunelm-group-reports-another-strong-period-of-growth-in-the-first-quarter/4121130042
- Published: 2023-10-19T07:33:24+01:00
- Author: Amilia Stone

**Dunelm Group plc **(LON:DNLM), the UK’s leading homewares retailer, has updated
on trading for the 13-week period ended 30 September 2023.

|  | **Q1** | **YoY** | 
| **Total sales** | £390m | +9% | 
| **Digital % total sales^(1)** | 35% | +2ppts |

_^(1) Digital includes home delivery, Click & Collect and tablet-based sales in 
store_

**Highlights**

·    Strong sales performance, with total sales increasing by 9% to £390m

·    On track with our accelerated store roll-out plan of five to ten stores per
year for the next two years, with one new store opened in Q1 and a further three
expected to open before the end of Q2

·    Continuing to offer customers outstanding value while increasing gross margin
by 120bps

**Delivery against our plans driving strong sales growth  **

We are pleased to report another strong period of growth in the first quarter, with
total sales increasing by 9% to £390m, largely driven by volume. Both our stores
and digital channels performed well, with the contribution from digital sales up
2ppts year-on-year to 35%.

As a long-standing specialist with deep product mastery, in a complex consumer environment
we were able to carefully manage gross margin whilst continuing to focus on offering
outstanding value to our customers.

Growth was broad based across our categories with our new autumn/winter ranges, 
including new collaborations with Disney and the Natural History Museum, resonating
well by offering colour and personality to help customers find joy as they enhance
their homes. Our upholstery ranges also performed strongly, with good growth in 
sofas and sofa beds, where we have added new shapes and colours to our best selling
ranges. 

**Gross margin**

We benefited from a net tailwind from freight and foreign exchange rates whilst 
continuing to offer outstanding value to our customers. We delivered growth in sales
volume while improving gross margin by 120bps, consistent with our full year guidance
for gross margin to increase by c.100bps year-on-year.

**Summary and outlook**

We continue to focus on making every pound count, for both our customers and our
business, and we are making good progress against the plans we set out in our results
announcement in September.

We are seizing the opportunity to amplify our brand and extend our reach, with our
new ‘Home of Homes’ brand marketing campaign, which launched at the end of September.
This is our biggest and widest reaching campaign to date, taking the brand to new
audiences and showcasing the breadth of our homewares offering.

We continued to strengthen our customer offer, with convenient five-day lead times
on most of our upholstery ranges, improving availability in categories such as cabinet
furniture and introducing conscious choice options into our Christmas baubles ranges.
We also introduced exciting new lines, such as live plants and personalised products.

We are seizing the opportunity to extend and digitalise our total retail system.
With one new store opened during the quarter and a further three stores expected
to open before the end of Q2, we are on track to achieve our full year target of
five to ten new store openings (including relocations).

Whilst the UK economy and consumer outlook remain relatively uncertain, we are well
placed to deliver ongoing sustainable growth as consumers continue to enjoy the 
outstanding value proposition for which we are known.

> **Nick Wilkinson, Chief Executive Officer, commented:**
> “Our proposition, which offers an increasingly wide range of homewares products,
> continues to prove popular with customers, as we delivered another strong sales
> performance in Q1. We continue to have a laser focus on outstanding value, and
> customers can now find even more choice with the introduction of new ranges such
> as live plants.
> “We are reaching more and more UK consumers through our expanding store estate,
> and our latest marketing campaign, which is our biggest to date, showcases the
> breadth of the Dunelm offer, reinforcing our position as ‘The Home of Homes’.
> “There remains a significant opportunity for Dunelm to take further market share
> and we are excited about the progress we are making against our plans, through
> targeted and thoughtful investment, in order to seize the compelling opportunities
> ahead of us. We remain very confident about our prospects for continuing to drive
> sustainable growth.”

**Next scheduled event:**

Dunelm will release its second quarter trading update on 18 January 2024.

**Quarterly analysis:**

| ** ** | **52 weeks to 29 June 2024** | 
| ** ** | **Q1** | **Q2** | **H1** | **Q3** | **Q4** | **H2** | **FY** | 
| Total sales | £389.6m |  |  |  |  |  |  | 
| Total sales growth | +9.2% |  |  |  |  |  |  | 
| Digital % total sales | 35% |  |  |  |  |  |  |

| ** ** | **52 weeks to 1 July 2023** | 
| ** ** | **Q1** | **Q2** | **H1** | **Q3** | **Q4** | **H2** | **FY** | 
| Total sales | £356.7m | £478.3m | £835.0m | £423.3m | £380.5m | £803.8m | £1,638.8m | 
| Total sales growth | -8.3% | +17.6% | +5.0% | +6.1% | +6.1% | +6.1% | +5.5% | 
| Digital % total sales | 33% | 35% | 34% | 36% | 39% | 37% | 36% |

_^(2) Ordinary dividends plus special dividends plus special distributions._

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