Dunelm’s transformation into a digital-first, omni-channel player is paying off, with the company reporting a 45% increase in pre-tax profits for the year, hitting £158m to 26 June. Digital sales rose 115%.
Total sales grew by 26.3% to £1.3bn from £1.05bn the previous year and the chain has also increased its market share considerably across the period.
For a third of the report period the retailer’s stores were shut and its swift switch to a digitally-led sales process has helped drive up revenues despite this. Its click and collect service has also been a boon in more recent months as shoppers tentatively return to stores.
Nick Wilkinson, CEO, Dunelm, comments: “We delivered an excellent performance in FY21, despite our stores being closed for more than a third of the year, demonstrating the strength and resilience of our business model and the adaptability and commitment of our colleagues and suppliers.”
However, Wilkinson issued a note of caution: “Whilst the macro-outlook remains uncertain and we are seeing some industry-wide issues such as ongoing supply chain disruption and inflationary pressures from raw materials, freight costs and driver shortages, we feel well placed to continue managing these challenges.”
He adds: “Trading in the first ten weeks of the new financial year has been encouraging, with growth against strong comparatives and continued market outperformance.”
Commenting on the results, Russell Pointon, Director, Consumer, at Edison Group, says: “With large portions of the population confined to their homes for a large portion of the previous year, home decorating and renovating was at the top of many people’s agendas. It comes as no surprise then that Dunelm Group, the UK’s leading homewares retailer, announced that it had experienced very strong sales growth for the year, up 26% despite stores being closed for long periods. The company also experienced significant market share gain with its UK homewares market share up 1.6%pts to 9.1%. Digital sales unsurprisingly soared by 115%, as it successfully scaled new technology and operations to respond to the increase in demand, including a significant expansion of the company’s Click & Collect offer. Gross margin was up 130bps. This was primarily driven by a smaller than traditional winter sale due to store closures, sourcing gains, and its summer sale’s delayed timing this year.”
Walid Koudmani, Market Analyst at financial brokerage XTB adds: "DuneIm’s financial results proved to be surprisingly positive, indicating the continuing growth of the company along with significant market share gain (rising from 1.6% to 9.1%) These are strong indications of positive potential for the company considering stores were closed for a good part of the financial year and the general economic situation of the UK. The company will have to continue innovating and expanding its offerings in order to stimulate sales growth moving forward as competitors attempt to regain lost territory. Positive performance has also reflected in an increase in dividends which could further boost investor confidence in the company moving into the final quarter of the year."