Dunelm flags ‘softer’ March trading as profits set for lower end of targets

Dunelm has revealed a slowdown in sales growth in March amid an “uncertain” economic backdrop, warning that its profits are on track to hit the “lower end” of targets as a result.

The homeware and furnishings retailer saw shares fall in early trading on Thursday as a result.

The Leicester-based company said sales over the three months to March 28 “started well” following a good winter sale and positive responses to its spring ranges.

However, it warned shareholders that it “experienced a period of broad-based softening” in trade during March.

The retailer reported that total sales increased by 2.1% year-on-year to £472 million over the latest quarter.

It means that sales for the year-to-date are up 3.1% to £1.4 billion, following growth of 3.6% in the previous half-year.

Dunelm said its cost plans are on track for the current half of the financial year but flagged that instability in the Middle East is expected to have a “small direct cost impact in this financial year”.

Recently appointed chief executive, Clo Moriarty, said: “We saw further sales growth in Q3, against an uncertain backdrop for both customers and businesses.

“Although the external environment is not helpful in the short term, we continue to focus on the areas within our control – strengthening our proposition while operating efficiently and effectively.

“Alongside this, we are making good progress building our long‑term growth plans with some exciting developments beginning to emerge, including a much stronger store opening pipeline and some encouraging early results from our recently launched app.”

Ms Moriarty, previously chief retail and technology officer at Sainsbury’s, took up the role of chief executive at the furniture store in October last year.