(Reuters) – Dunelm Group reported higher annual profit on Wednesday and said sales remained robust in the first ten weeks of the new fiscal year, signalling strong demand for home furnishing despite the cost-of-living crisis in Britain.
Shares rose as much as 6.5% in early trade.
Chief Executive Officer Nick Wilkinson said the operating environment was extremely challenging and the group was putting a tight lid on costs.
The British homeware retailer saw a 32% rise in profit before tax for the year ended July 2 to 209 million pounds ($240.12 million).
“We note that our latest homewares pricing survey indicates Dunelm has improved its price competitiveness through the introduction of more entry-price ranges, which we think should help to support topline,” said an analyst at RBC Capital Markets.
The company has been building its inventories to combat industry-wide supply chain disruptions, with stock holding 29% higher than last year.
However, Dunelm expects stock holding to reduce in 2023.
Dunelm, which sells furnishings ranging from cushions and bedding to kitchen equipment, expects to deliver about 50% gross margin in 2023, slightly lower than the 51.2% it saw in 2022.
($1 = 0.8704 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Krishna Chandra Eluri)
