(Reuters) -British homeware retailer Dunelm reported annual profit above market expectations on Wednesday and said it had made a solid start to the new fiscal year, helped by strong demand for its furnishings items like bedding and garden furniture.
WHY IT’S IMPORTANT
The consumer environment remains challenging and there is uncertainty over the timing of a sector recovery.
Dunelm has been growing its market share in the UK, and strong volumes and store expansion make the retailer confident about achieving its 10% market share target in the medium term. It currently has a 7.7% share of the total addressable market, which includes homeware and furniture.
CONTEXT
Dunelm has kept prices lower as budget-strapped customers look for cheaper products in stores and online. It has also expanded its store estate to draw in more customers as sales of big-ticket items like sofas and televisions slow.
BY THE NUMBERS
Profit before tax rose 6.6% to 205.4 million pounds ($269.09 million) in the year ended June 29, while analysts on average had forecast a profit of 201 million pounds.
It expects sales growth in fiscal 2025 to be driven by volume and further market share gains.
KEY QUOTES
“The continued delivery of volume-driven sales growth and further share gains in this softer market underlines this, and the strength and resilience of our business model,” CEO Nick Wilkinson said in a statement.
“Whilst we are gradually seeing improvements to economic indicators, we are yet to see a meaningful change in consumer spending habits in our markets.”
WHAT’S NEXT
Dunelm will update the market on its first-quarter trading on Oct. 24.
($1 = 0.7633 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Subhranshu Sahu)
