Resilient homewares market drives Dunelm’s performance

  •    Author: Mike Jasfer

Dunelm has announced its preliminary results for the 52 weeks to 27th June 2020, citing a “strong performance in an unprecedented environment”.
Total sales increased in the eight months to February by +6.8%, supported by an +8.8% increase in rolling 12-month unique active customer numbers, while online (home delivery) sales grew +105.6% in the fourth quarter.
Recent trading has also proved strong, with total YoY sales growth of +59% in July and +24% in August, partly as a result of pent-up demand and the timing of Dunelm’s summer sale, and reflecting a “resilient” homewares market.
For the first two months of FY21, Dunelm says store footfall has been positive, while digital sales were 31% of total sales, with online (home delivery) sales growth of some +130% YoY.
CEO Nick Wilkinson comments: “We made good progress before the onset of Covid-19, building our digital capabilities, extending our product choice and value, and broadening and deepening our customer base. 
“These unprecedented times have confirmed the strength of the Dunelm business model, with our integrated online and out-of-town stores proposition, broad product range, long-term supplier relationships, strong cash generation and operational grip. Our colleagues have been an inspiration throughout, living our shared values, and I would like to thank them all for their adaptability and resilience. 
“These recent months have taught us about our ability to innovate at pace and we are emerging stronger as a result, giving us the confidence to accelerate our strategic priorities, all of which focus on being Customer 1st. 
“Growth in the first two months of the new financial year has been significantly ahead of our expectations, reflecting both pent-up demand following the store closure period and a resilient homewares market. Our customers have adapted quickly to shopping safely in our mainly out-of-town superstores and we continue to see strong growth in our home delivery offer.
“Whilst the year-to-date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns. However, we remain confident in our ability to adapt to the environment and are well positioned to continue to grow market share and help even more customers create a home they love.”
Dunelm has also announced that William Reeve, independent non-executive director, has been appointed as senior independent director. William was appointed to Dunelm’s board in July 2015, and has chaired its Remuneration Committee since November 2017.
The uncertain outlook means Dunelm’s board is not recommending a final dividend for FY20, in order to retain maximum liquidity ahead of winter peak trading. The retailer also points out that, with its stores re-opened, it has not made claims under the Job Retention Scheme (JRS) in FY21, and will not claim the forthcoming JRS Bonus.
The retailer now boasts a robust balance sheet, with year-end net cash of £45.4m, access to £175m of approved banking facilities, and confirmed Covid-19 Corporate Financing Facility eligibility.

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