Dunelm shrugs off 'difficult' trading conditions to notch up higher profits

14 February 2024 , 09:02

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Dunelm expressed satisfaction with trading in 2024, attributing it to a resilient customer base, but warned that the consumer outlook remains "uncertain". (Image: PA Archive/PA Images)

Despite a challenging retail market, homewares retailer Dunelm has seen an increase in half-year profits.

The company reported a 4.8% rise in pre-tax profits to £123 million for the six months to December 30, with sales up by 4.5%. However, there was a significant slowdown in sales growth to 1% in the final three months of 2023, compared to a surge of 17.6% a year earlier.

Despite this, Dunelm expressed satisfaction with trading in 2024 so far, attributing it to a resilient customer base, but warned that the consumer outlook remains "uncertain". The Leicester-based firm noted that profit margins will slow over its second half due to rising shipping costs and currency fluctuations.

The group said: "We are managing the impact of ships taking longer, more costly routes as they avoid the Red Sea area." Dunelm added that it has kept operating costs under control, partially offsetting inflationary increases and investment through productivity and efficiency initiatives.

Chief executive Nick Wilkinson said that the group had kept "our customers front of mind" in a "more difficult trading environment". He added: "Despite ongoing pressures on consumers, we are encouraged by the wide variety of new customers shopping with Dunelm, and existing shoppers also coming back more frequently."

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He added: "Sales growth has predominantly been driven by volume, rather than through price increases, and we have grown customer numbers and frequency of shopping visits." The business, home to over 11,000 employees, confirmed it's on track to hit their expected profits of £202 million by the 2023-24 financial year.

Lawrence Matheson