(Reuters) -Britain’s Dunelm Group reported a rise in quarterly sales on Thursday and forecast its annual profit to slightly exceed market consensus as freight-related costs ease for the homeware retailer, sending its shares up as much as 8%.
The group, which sells items ranging from bedding, sofas, and chairs to garden furniture, said sales in the fourth quarter that ended on June 29 rose 4%, helped by strong summer sales in June, while full-year sales also grew 4% to 1.71 billion pounds.
It also said it now expected profit before tax for the current year to be slightly ahead of analysts expectations of 200 million pounds ($260.14 million) in a company compiled consensus.
“At a time when most retail updates remain negative, Dunelm has delivered another robust performance, implying continued market share gains,” analysts at Peel Hunt said in a note.
The sales figures marked a recovery from a slowdown it witnessed in the prior quarter after a particularly weak March.
The retailer said it expected its annual gross margin to be about 170 basis points higher compared to last year, thanks to continued benefits from reduced freight rates.
Dunelm earlier this year said it had managed costs related to disruptions in the Red Sea, which allowed it to improve its gross margin.
Disruption to shipping through the Suez Canal, due to attacks by Iran-aligned Yemeni Houthi militants in the Red Sea, led to companies around the globe to warn on delays and higher freight charges.
Dunelm had maintained lower prices for its products over the year to accommodate customers who were grappling with high household bills, but easing inflation has brought some relief to companies and customers in Britain.
($1 = 0.7688 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Rashmi Aich and Tomasz Janowki)
