A Worrying Braking of Sales Growth
Dunelm also saw its shares drop into free fall on Thursday. The British homewares retailer said sales growth had slowed. Sales grew 1.6% on-year in the second quarter. That was down from a 3.5% increase in the prior quarter. Higher costs and soft consumer spending weighed on the retail sector. Dunelm’s financial year runs to the end of June.
Pressures from Outside Take Their Toll on Retailers
Higher employer taxes and minimum wage squeezing retailers. They are already struggling with higher operating costs. That could weigh on consumer spending. Dunelm anticipates coping with these cost pressures. They intend to do so on the medium term. The company kept its annual profit forecast unchanged. They gave no other details. The shares of the FTSE 250 constituent dropped. They sat at 978 pence, close to a nine-month low. The index’s largest percentage loser was Dunelm.
Analyst Commentary & Financial Results
Dunelm: Peel Hunt analysts commented. They said it wins market share. They don’t see any sign of broader consumer recovery. APs are still not following up on the broader sector. For FY25 pre-tax profit, analysts expect 213 million pounds. This is a company-compiled consensus. Sales in the first half were up a modest 2.4%. Furniture did especially well. Add up sales and totalled 894 million pounds. That’s up from 872 million pounds last year. This includes the six months through Dec. 28.
Strategic Initiatives and Future Directions
When Dunelm also becomes a brand name, they will focus on market stake. They do so through product expansions. They also make their online business better. The company sells armchairs and kitchen essentials. In November 2024 they purchased Home Focus at Hickeys. This is an Irish soft furnishing company. Online sales accounted for 39% of first-half sales. • Dunelm: to open five new UK superstores. They are due to open in the second half of 2025. The customer response has been positive according to CEO Nick Wilkinson. He said it had options focused around price for customers such as Dunelm.
