// Dunelm’s pre-tax profits slip from £140.8m to £117.4m
// Despite the drop, the retailer saw sales increase to £835m during the second half of last year
Dunelm saw its sales rise to £835m during the second half of 2022 – but the business warned investors that the consumer outlook remains “unpredictable” amid inflationary pressures and the cost-of-living crisis in the UK
The Leicester-based homewares retailer posted a lower half-year profit as customer spending was pinched during the holiday season.
Dunelm’s pre-tax profits were down, slipping 17% from £140.8m to £117.4m, but it said this merely reflected “the impact of sale timing, strong post-pandemic demand in the prior year, and inflationary impacts.”
The company told the London Stock Exchange it had anticipated to post the decrease.
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The business highlighted that the period included three new store openings, including one relocation, and the investment of £17m in digitalisation, capability and capacity to support future growth.
As a result, the retailer which runs more than 179 stores across the UK still expects its full-year profit to beat market forecasts of £176 million due to the “resilience” of its shoppers but warned that the consumer outlook remains unpredictable.
“While forecasts remain unchanged given consumer uncertainty, we see more upside than downside risk,” analysts at Peel Hunt said in a note.
Dunelm chief executive Nick Wilkinson said: “We are all learning to live in a new, complex and rapidly evolving economic reality. Recognising this, our focus has been on ensuring that we continue to offer outstanding value to our savvy customers through a proposition which is committed to quality, at the right price, across an expanding range of relevant products. We believe that this is why we have continued to grow our sales, customer numbers and market share.
“In this environment, agility, creativity and innovation are more important than ever and we have endeavoured to make every pound count, both for ourselves and for our customers, helping to mitigate the impact of inflation. While we do this, it is important that we also maintain our long-term thinking, invest for sustainable growth and continue to ensure we are in a position to seize the significant opportunities ahead of us.”
Wilkinson added: “Much like during the pandemic, our customers, colleagues and the communities we operate in will remember how businesses behaved when times were tough, and we are confident that our approach of offering outstanding value and choice for all will enable us to – once again – emerge from this challenging period stronger than ever.”
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