TIDMDNLM
RNS Number : 0146P
Dunelm Group plc
14 October 2021
14 October 2021
Dunelm Group plc
First quarter trading update
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading
homewares retailer, reports on trading for the 13-week period ended
25 September 2021.
Q1
-----------------
FY22 YoY 2YoY(2)
----------------- ----------- ------- --------
Total sales GBP388.8m +8.3% +48.0%
----------- ------- --------
Digital % total 33% +3%pts +14%pts
sales(1)
----------- ------- --------
(1) Digital includes home delivery, Click & Collect (or
Reserve & Collect before October 2019 ) and tablet-based sales
in store.
(2) 2YoY represents performance against the comparable period in
FY20.
Continued strong growth across the total retail system and
market share gains
Total sales in the first quarter increased by 8.3% against a
very strong comparative period in FY21, when sales grew by 36.7%.
This strong performance was mainly driven by the positive customer
response to our Summer Sale in July (which was postponed from the
fourth quarter of FY21), improved product availability and some
popular new ranges in our furniture categories.
Given the strength of the comparative Q1 FY21 period, which
benefited from some pent-up demand following store closures during
the first national lockdown, we are pleased to have grown sales
across the total retail system during the quarter, with digital
sales growing at 20%. This strong performance demonstrates the
strength of our integrated offer, providing customers with an
attractive digital proposition, combined with local, friendly and
convenient in-store shopping experiences.
The data we receive from GfK shows that we continued to
outperform the homewares market 3 and gained further market share
in each week of the quarter.
3 Based on management's estimates using weekly GfK homewares
market data.
Robust gross margin
Gross margin in the first quarter decreased by 10bps compared to
Q1 FY21, reflecting the Summer Sale timing impact, largely offset
by a higher mix of full price sales and sourcing gains to offset
anticipated cost price increases.
We expect gross margin for the first half to be flat to slightly
positive compared to H1 FY21, noting that Q2 FY21 was impacted by
store closures. As previously guided, we anticipate gross margin
for the full year will be c.50-75bps lower than FY21, reflecting
that the second half is expected to include both a Winter and
Summer Sale.
Financial position
At 25 September 2021, the Group had net cash of GBP209m (FY21
Q1: GBP175m) and access to GBP175m of approved banking facilities
which remain unutilised. The previously announced special and FY21
final ordinary dividends, totalling GBP178m, will be paid out
during the second quarter(4) .
Inventories at the end of the period were GBP168m (FY21 Q1:
GBP136m; FY20 Q1: GBP161m), with good levels of availability across
most of our product categories.
(4) Final dividend subject to shareholder approval at the AGM on
16 November 2021.
Outlook
The macro outlook remains uncertain, in particular regarding
supply chain disruption and inflationary pressures from freight and
driver shortages. In line with the comments made at our Preliminary
Results in September, we continue to work closely with our
long-term suppliers and partners to mitigate the impact of these
factors within our supply chain.
Whilst we are not immune to the challenges being widely
reported, we feel well placed relatively to manage them. In
particular, we have good stock levels across our stores, warehouses
and supplier partners, a low proportion of seasonal ranges within
our product offer, and also benefit from a higher propensity for
customers to substitute products within homewares categories, given
our broad range.
Sales growth in the first quarter of the new financial year has
been encouraging and we have seen continued outperformance versus
the homewares market. In the absence of any significant change in
consumer demand driven by further Covid-related lockdowns or other
industry shortages, the Board expects that FY22 full year profit
before tax will be in line with analysts' recently increased
consensus expectations(5) .
(5) Management understand the range of analysts' estimates
(which have been updated since the FY21 results on 8 September
2021) for FY22 PBT is GBP167-GBP190m, with consensus of
GBP179m.
Nick Wilkinson, Chief Executive Officer, commented:
"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 comparative period last year,
which benefited from pent-up demand following the first UK
lockdown.
"We continue to invest in enhancing our market leading
proposition to win more customers who shop more frequently across
Dunelm's expanding range. For example, we have now developed a 'my
favourites' functionality online, which is another step in getting
closer to our customers and making their homewares shopping as easy
as possible.
"In the current environment, our purpose to help customers
create the joy of truly feeling at home feels increasingly relevant
and we are excited about our plans to become the 1(st) choice for
home for more UK shoppers."
For further information please contact:
Dunelm Group plc investorrelations@dunelm.com
Nick Wilkinson, Chief Executive Officer
Laura Carr, Chief Financial Officer
MHP Communications 07710 032 657
Simon Hockridge / Rachel Mann / Pete Lambie dunelm@mhpc.com
Next scheduled event:
Dunelm will release its second quarter trading update on 13
January 2022.
Quarterly analysis:
53 weeks to 2 July 2022
Q1 Q2 H1 Q3 Q4 H2 FY
---------- --- --- --- --- --- ---
Total sales GBP388.8m
---------- --- --- --- --- --- ---
Total sales growth 8.3%
---------- --- --- --- --- --- ---
Digital % total
sales 33%
---------- --- --- --- --- --- ---
Gross margin improvement -10bps
---------- --- --- --- --- --- ---
52 weeks to 26 June 2021
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales GBP359.1m GBP360.4m GBP719.4m GBP236.6m GBP380.2m GBP616.8m GBP1,336.2m
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales growth 36.7% 11.8% 23.0% -16.8% 101.7% 30.4% 26.3%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Digital % total
sales 30% 41% 35% 93% 37% 59% 46%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Gross margin improvement +100bps +10bps +50bps +30bps +460bps +220bps +130bps
---------- ---------- ---------- ---------- ---------- ---------- ------------
Notes to Editors
Dunelm is the UK's market leader in homewares, with a specialist
offering for customers across multiple categories via its 175
predominantly out-of-town superstores and website, dunelm.com.
The business was founded in 1979 as a market stall, selling
ready-made curtains. The first shop was opened in Leicester in
1984, with the first superstore opening in 1991. With a vision to
become the 1 (st) choice for home, Dunelm offers quality, value and
style throughout its extensive product range, alongside services
such as Home Delivery, Click & Collect and Made to Measure
window treatments. From its textiles heritage in areas such as
bedding, curtains, cushions, quilts and pillows, Dunelm has
broadened its range into categories including furniture,
kitchenware, dining, lighting, outdoor, craft and decoration. Its
c.50,000 product lines include specialist own brands and labels
such as Dorma and Fogarty, sourced from long-term committed
suppliers.
Dunelm's purpose is 'To help create the joy of truly feeling at
home. Now and for the generations to come'. The business is
headquartered in Leicester and employs over 10,000 colleagues. It
has been listed on the London Stock Exchange since October 2006
(DNLM.L) and has a current market capitalisation of approximately
GBP2.6bn.
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