Dunelm Group plc, a group of British home furnishings retail store with more than 150 outlets and over 100 in-store Pausa coffee shops throughout the United Kingdom, had its shares jump because of increased sales.
Home furniture store Dunelm has published its best sales performance this year but cautioned that profits would be a little less low than expected due to slow trading over Easter weekend.
The group reported that full-year sales rose 8.5 percent to £955.6m, although they were pulled lower by a 7 percent dip in sales over Easter.
However, Dunelm’s recent trading has been more promising with sales in the 13 weeks to July 1 increasing by 17.7 percent to £240m, raised by its newly acquired online retailer Worldstores, which involves Kiddicare.
Shares in the company jumped by 34.5 percent, or 5.78 percent, in midday trading to 631.5p as investors applauded the recent upbeat sales numbers.
“The Worldstores acquisition will provide a massive leap forward to our online and store offer that we think our customers will love,” said John Browett, chief executive. “The integration is going well, and we are confident in the benefits it will generate.”
Mr Browett, who entered Dunelm after a short, ill-fated stint at US tech giant Apple, has said that Dunelm can get a share in the homewares market.
“Dunelm’s uplifting fourth-quarter performance is a positive sign for homewares in what is a challenging retail environment,” said Emily Stella, senior analyst at Global Data.
Around 20 percent of Dunelm sales are online, but the company stated that it was still thinking to add an extra seven stores to its already 159-branch estate and complete a further 11 shop renovations.
“We continue to invest in the business for the longer term to improve our customer proposition and infrastructure and, despite an uncertain consumer environment, we go into the next financial year with some good momentum,” said Mr Browett.
The company stated that it was suspecting its pre-tax profits to be within the scope of £109m and £111m, in comparison to a consensus of £113m and early estimates of £115m.
“Dunelm has had a reliable and consistent space growth strategy. However, we believe the outlook for the homewares market remains tough – a combination of slowing housing transactions and falling consumer disposable income will put increasing pressure on discretionary spending,” said RBC analyst Shelly Xie.