Dunelm claims it is ‘well placed’ to tackle supply chain issues

Dunelm is ‘well placed’ to cushion supply chain blow and shipping problems as sales continue to rise

  • Group says lower seasonal product levels will help avoid supply chain problems
  • Trade update reveals new sales boost and full year forecast on track










Dunelm Group has said it remains optimistic about its ability to operate amid global supply chain problems and shipping delays.

The homeware retailer said the fact that it sells a limited number of seasonal products, has “good” inventory levels and customers willing to replace products would all help cushion the blow from wider supply chain problems.

In a trading update, the group said it expects full-year profits to be around £179 million, which is in line with analysts’ forecasts.

Optimistic: Dunelm Group has said it remains optimistic about its ability to operate amid global supply chain problems and shipping delays

Shares in the FTSE 250-listed company jumped in early morning trading and are currently up 2.15 percent or 28.00 pence to 1328.00 pence. A year ago, the stock’s price was 1,557.00 pence, meaning it’s fallen about 14 percent in the past year.

In the period 13 weeks to 25 September, the retailer’s total sales rose 8 percent to £388 million. Thirty-three percent of sales were made online.

The group said: ‘This strong performance was primarily due to positive customer response to our Summer Sale in July (which was postponed from Q4 FY21), improved product availability and some popular new ranges in our furniture categories.’

During the period, Dunelm’s gross margin was 0.1 percent lower than last year due to product discounts.

The gross margin for the first half is expected to be flat to slightly positive compared to last year’s figures, while the gross margin for the full year will decline due to the summer and winter sales, the group said.

Data from GfK showed that Dunelm continued to outperform the household goods market, gaining further market share in each week of the quarter.

On September 25, Dunelm had £209 million in cash in the bank and access to £175 million in approved bank facilities that have not yet been used.

On the rise: Dunelm FTSE 250 Listed Household Goods Shares Rising Today

On the rise: Dunelm FTSE 250 Listed Household Goods Shares Rising Today

Nick Wilkinson, Dunelm’s CEO, said: ‘We are pleased with our performance in the first quarter, with sales growth across all channels and continued market share gains, especially given the strength of the comparable period last year, which benefited from pent-up demand after the UK’s first lockdown. .

“We continue to invest in improving our market-leading proposition to win more customers who shop more frequently in Dunelm’s growing range. For example, we have now developed a “My Favorites” functionality online, which is another step to get closer to our customers and make shopping for their household items as easy as possible.

“In today’s environment, our goal of helping customers create the joy of truly feeling at home feels increasingly relevant and we are excited about our plans to become the first choice of home for more UK shoppers.”

Freetrade analyst Gemma Boothroyd said: “Dunelm’s first quarter results seem to say it’s not just another pandemic miracle.

Dunelm is working on a number of challenges and changes that will make it increasingly difficult to reach those peak Covid sales volumes again. Although this quarter went reasonably well, with sales not only higher than last summer’s, but also the year before.’

.