Dunelm continues to show strong growth, both on and offline, posting a record pre-tax profit of £140.8m for the FY22H1, up 25.3% on the same period last year. Online sales continued to be strong, accounting for 33% of sales.
The company has seen strong sales growth across the total retail system with sales up 10.6% verses FY21H1 and 36.0% verses FY20H1 and it continues to outperform the wider market in both homewares and furniture.
Proposition and brand development driving active customers to 13 million, a 6.3% increase over 12 months, while continued investment in digital capabilities to improve its online customer with new ecommerce fulfilment facility opened in Stoke gathers pace.
Online sales were down slightly as a proportion of total sales – 33% compared to 35% the previous year – however, online remains a key pillar for the company, increasing by 120.7% in absolute terms since FY20H1.
Nick Wilkinson, Chief Executive Officer, Dunelm, comments: “I would like to express my sincere appreciation to all my colleagues and our committed supplier partners for their adaptability and achievements and for living our Dunelm shared values every day. Together we have navigated another period filled with significant and evolving external challenges and delivered a very strong performance in the first half, with continued growth in customer numbers, further market share gains, record sales and particularly strong profitability.
“When we announced our interim results in 2020, we were weeks away from the world being turned upside down. Two years later, we are moving forwards as a bigger, better business, with more capability, more resilience, more ambition, and delivering accelerated growth.
“We have not only worked hard and innovated to enhance our customers’ experience across all channels and categories, but have also continued to develop our customer proposition and capabilities at pace to support our future growth. Our product range is now broader and better than ever, with an increasing focus on sustainability, as demonstrated in our new collection which has been curated in collaboration with the Natural History Museum. We look to the future excited, energised and eager to continue being our customers’ 1st choice for home.”
Analyst Russell Pointon, Director, Consumer, at Edison Group, says: “This strong set of H1 results show that Dunelm has navigated well through the stormy seas caused by Omicron, inflationary pressures and supply chain issues. The group reported record profit before tax of £140.8 million, up 25.3% on H1 FY21, alongside strong sales growth of 10.6% to reach £795.6m. In comparison to H1 FY20, sales were up a notable 36%. The group also saw an increase of 6.3% over 12 months in active customers, reaching 13 million. “
Pointon continues: “Digital sales represented 33% of total sales in the half, increasing by 120.7% in absolute terms since H1 FY20. Online shopping looks set to maintain a long-term hold over consumer behaviour, and Dunelm emphasised that it will continue to invest in the development of both its digital customer experience and technological capabilities. The recent opening of the dedicated ecommerce operation in Stoke signals the group’s intention to optimise digital fulfilment and drive its future growth ambitions.”
He concludes: “The group reiterated that it expects FY22 PBT to be in line with expectations, which were recently upgraded. Management recognised that the macroeconomic outlook remains uncertain, but offered assurance that the group was well placed to face inflationary pressures. The underlying confidence in this outlook is supported by this strong set of results, which signal Dunelm’s resilience against the wider challenges which have been plaguing the retail sector.”
Walid Koudmani, market analyst at financial brokerage XTB adds: “Dunelm’s Half Year Report showed strong sales growth across the total retail system with sales up 10.6% vs H1 FY21 and pointed to an optimistic outlook for the rest of the year. While the company has performed well recently, it acknowledges uncertain economic conditions and continues to be ready to tackle them. An improving global situation and an easing of inflationary pressure could be beneficial, while on the other hand, a continuous rise in costs and potential supply chain issues could prove to be a significant hurdle for the short to mid term.”
