Home furnishings retailer sees strong trading over last 10 weeks, following on from positive full-year results.
Dunelm Mill reported total sales growth of 26.5% for the 10 weeks to September 12, 2009. Like-for-like (lfl) sales were up 16.1% for the start of its new financial year, while gross margin improved 180 basis points.
The figures were published as part of the retailer’s final results for the year to July 4, 2009, which reported that total sales were up 7.5% to £423.8m for the 53-week period. On a comparable 52-week basis, sales were up 6.3% to £417m, with a like-for-like decrease of 0.5% and gross margin up 120 basis points.
Trading was particularly strong in the latter part of the year, with lfl growth of 5% in the 26 weeks to June 27, 2009. Dunelm opened six new stores over the course of the year, with three further units having opened since year-end. The retailer stated that it is “contractually committed” to nine further units and explained that the “relatively weak state of the commercial property market”, allowed it to roll out its home furnishings offer to more locations”.
Dunelm chief executive Will Adderley said: “The last financial year was again a positive one for sales ad profit growth. In a tough market we continued to deliver strong performance and we have continued to grow our market share.
“The strong like-for-like sales performance in the latter weeks of the financial ear has continued through the rest of the summer and we are very pleased with the start to the financial year.”
He explained that Dunelm is “confident” that its ‘Simply Value For Money’ motto and proposition will continue in its appeal to customers given the current economic climate. “Our product ranges are suitable for all budgets and tastes. Our business is not significantly reliant on big-ticket purchases – our average basket spend remains below £30.”
Mr Adderley concluded: “Having said all this, we recognise that it will be very challenging to maintain our recent trading performance as like-for-like sales comparatives start to strengthen, and economic factors potentially subdue consumer spending.”
Pre-tax profit was up 8.2% to £53.5m for the 53 weeks, with the recommended final dividend of 4p per share, equating to £8m, which will be paid December 5.
Chairman Geoff Cooper said: “We expect that the retail environment will remain challenging for some time, reflecting the depth of the background difficulties in the UK economy. In this scenario, consumers’ continual search for better value, together with a trend towards switching of expenditure into home improvements, leaves us well positioned to make further progress.”