Dunelm warns profits at lower end of targets as March sales soften

The homeware retailer said sales over three months to March 28 had started well following a good winter sale

Dunelm has reported a slowdown in sales growth during March, citing an “uncertain” economic climate, and cautioned that profits are set to land at the “lower end” of expectations.

The Leicester-based homeware and furnishings retailer said sales over the three months to March 28 “started well”, buoyed by a strong winter sale and encouraging responses to its spring ranges. But it told shareholders that it “experienced a period of broad-based softening” in trade throughout March.

The retailer said total sales rose 2.1% year-on-year to £472 million over the most recent quarter. This brings year-to-date sales up 3.1% to £1.4 billion, following growth of 3.6% in the preceding half-year.

Dunelm noted that its cost plans remain on track for the current half of the financial year, but flagged that instability in the Middle East is anticipated to have a “small direct cost impact in this financial year”.

Recently appointed chief executive Clo Moriarty said: “We saw further sales growth in Q3, against an uncertain backdrop for both customers and businesses.

“Although the external environment is not helpful in the short term, we continue to focus on the areas within our control – strengthening our proposition while operating efficiently and effectively.

“Alongside this, we are making good progress building our long‐term growth plans with some exciting developments beginning to emerge, including a much stronger store opening pipeline and some encouraging early results from our recently launched app.”

Ms Moriarty, who previously served as chief retail and technology officer at Sainsbury’s, assumed the position of chief executive at Dunelm in October last year.