• 11 October, 2017 News

    Dunelm’s shares rise as online sales spike but margins drop
    Shares in furniture retailer Dunelm heightened almost 6 per cent during early trading Dunelm’s shares rise as online sales spike but margins drop

    Shares in furniture retailer Dunelm heightened almost 6 per cent during early trading today. This news comes after its revenue spiked.

    Revenue for the company grew 24.8 per cent in the 13 weeks to the end of September to £247.9m. Majority of this growth was driven by online sales, which also jumped approximately 46.2 per cent to £19.9m, that now accounts for 16 per cent of sales, rising 19 per cent when “reserve and collect” is included.

    However, margins for the group were down by 220bps. This was mainly because of the integration of lower-priced Worldstores, which was acquired in 2016. The rest was according to “focus on newness” in the recent Dunelm ranges.

    Last month, Dunelm warned that tougher trading in the UK provided a challenging backdrop for the company. Though Neil Wilson, analyst at ETX Capital, stated that warnings of this kind have become necessary.

    “Under promising and over-delivering is a good approach for boards and investor relations departments, but are retailers overdoing ‘post-Brexit tough market conditions’ worries?" he said. "

    It’s become almost a reflex, with mention in virtually every company update this year. UK retail sales numbers continue to show resilience yet the companies who earn their crust in this environment keep on stressing how tough it is.”

    In the absence of a chief executive after John Browett's departure, chairman Andy Harrison said: "We have maintained the good momentum from the final quarter of the last financial year. Our like-for-like sales were boosted by favourable weather comparatives and, pleasingly, we continue to outperform the homewares market, with strong growth across the business, especially online."

    He added: "We head into the second quarter having opened a number of new stores and with an improved seasonal offer for the Christmas period, which we're sure will resonate well with customers.”

    Contact one of our brokers today at, www.forex.ltd.uk.


    Abi Moses

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