Shares in Dunelm took a hit as it warned over profits thanks to “challenging” trading conditions in its fourth quarter.
The furniture retailer said reduced footfall was the reason behind 4.7 per cent drop in like-for-like store sales during the period, compared to a growth of 1.2 per cent in the third quarter.
As a result, Dunelm now expects underlying profits for the year to be “moderately below” last year’s £109.3 million.
The unscheduled trading update prompted shares in the retailer to crash 10 per cent.
“Following a good performance in the first three quarters of the financial year, the group has recently experienced trading conditions which have been materially more challenging than had been expected, within a soft homewares market,” Dunelm said.
“These conditions have impacted our trading performance.”
Nonetheless, the retailer expects total full-year sales to be around £1 billion, an increase of approximately 10 per cent on 2017.
Meanwhile, like-for-like online sales are up 44 per cent, leading to total like-for-like sales growth of 0.1 per cent in the quarter to date.
Dunelm chief executive Nick Wilkinson said: “We have seen an unexpectedly challenging start to the fourth quarter, with continuing softness in the homewares market and reduced footfall to our stores.
“We are making good progress on our strategic plans to be a truly multi-channel retailer and further strengthen our customer offer.
“We will learn from recent trading and I remain optimistic about our ability to deliver strong sales and profit growth in the future.”