UK’s Dunelm lifts profit forecast after record Christmas

A view shows a logo of a Dunelm store in St Albans, Britain October 15, 2020. REUTERS/Peter Cziborra

  • Homewares retailer reports record Christmas trade
  • Says on track to beat market expectations
  • Store performance after COVID closures ‘encouraging’
  • Shares up 5%

LONDON, Jan 12 (Reuters) – British homewares and furniture retailer Dunelm (DNLM.L) reported record Christmas sales on Wednesday, putting it on track to soundly beat profit forecasts and lifting its shares.

The company, which has 176 stores and an online operation, reported sales of 407 million pounds ($555 million) for the 13 weeks to Dec. 25, its second quarter, up 13% on a year earlier and up 26% on the same period in 2019, before the pandemic.

It said it had seen “particularly encouraging growth from its stores”, while higher full-price sales of seasonal ranges helped boost margins by 160 points in the quarter.

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Chief Executive Nick Wilkinson said: “Whilst there are several macro uncertainties to be navigated, we feel well placed to continue to deliver profitable growth across all channels and grow market share.”

Dunelm said that as long as there was no significant new COVID-19 related disruption it expected its full-year pretax profit to be materially ahead of market expectations.

Its shares were trading up 5% in morning deals, as broker Peel Hunt upgraded its full-year pretax profit forecast by 27 million pounds to 206.1 million pounds.

Dunelm was a “business on form,” the broker said, with a proposition that was continuing to resonate strongly with customers.

Before the update, analysts on average were forecasting Dunelm’s pretax profit to come in at 181 million pounds, according to a company-compiled consensus.

($1 = 0.7335 pounds)

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Reporting by Paul Sandle Editing by Kate Holton and Mark Potter

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