Dunelm Christmas sales grow by 18% YoY

Dunelm delivered sales of £478m in the 13-week period ended 31 December 2022 which was 18% higher than last year, and 48% up from pre-pandemic levels.

• FY23 guidance remains unchanged despite the challenging macroeconomic environment
• Digital sales made up 35% of total sales in the quarter, 2 %-points higher than the same period last year.
• Gross margin of 51.1% was 170bps lower than last year, including a modest headwind of c.30bps from the timing of our Winter Sale.
• The timing of the Winter Sale provided a benefit of c.4ppts to the sales growth rate in the quarter, an impact which will reverse in Q3.
• Guidance for full year margin of c.50% remains unchanged. Gross margin in H2 anticipated to be lower than H1 due to the two Sale events in the second half of the year.

Outlook

• “Consumers are still adapting to the inflationary environment and our product offering, which includes many everyday essential items, is resonating with new and existing customers”.
• “In September 2022, the company compiled consensus average of analysts’ expectations for FY23 PBT was £178m, with a range of £130m to £193m”.
• “The current company compiled consensus average of analysts’ expectations for FY23 PBT is £172m, with a range of £131m to £186m”

Nick Wilkinson, Chief Executive Officer, commented:

• “We have delivered another strong performance and the relevance of Dunelm’s value offering has really come to the fore. Customers have enjoyed shopping our ‘Winter Warm’ ranges as they find innovative ways to manage rising heating costs. Our Christmas assortment also proved popular as customers prepared their homes for the festive period.
• “It is a difficult time for many people in our communities, so we were delighted to significantly grow our ‘delivering joy’ campaign this year, resulting in over 60,000 Christmas gifts being donated by customers and colleagues to local causes.
• “We are deeply conscious of the challenges which everyone is facing and remain focussed on making every pound count across our entire offer, so customers can feel confident in receiving outstanding value whatever their budget or taste.”