TIDMDNLM
RNS Number : 3679P
Dunelm Group plc
10 October 2019
10 October 2019
Dunelm Group plc
First Quarter Trading Update
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading
homewares retailer, reports the following trading update for the
13-week period ended 28 September 2019.
Revenue
Total like for like (LFL) sales increased by 6.4% in the first
quarter with good growth across the total retail system. Total
Dunelm growth was 7.5% including the benefit of new stores. The
beginning of the quarter was particularly strong, reflecting
continued market share gains and the weak comparative period last
year. In September trading was mixed, in part reflecting a softer
homewares market.
13 weeks to 28 September
2019
Revenue YoY Growth YoY Growth
(GBPm) (GBPm) (%)
-------- ----------- -----------
LFL Stores(1) 219.9 +6.2 +2.9%
-------- ----------- -----------
Online - Dunelm.com 35.7 +9.2 +34.7%
-------- ----------- -----------
Total LFL(2) 255.6 +15.4 +6.4%
-------- ----------- -----------
Non-LFL Stores(3) 7.0 +3.0 -
-------- ----------- -----------
Total Dunelm 262.6 +18.4 +7.5%
-------- ----------- -----------
Closed businesses(4) - -4.0 -
-------- ----------- -----------
Total Group 262.6 +14.4 +5.8%
-------- ----------- -----------
Comment from Nick Wilkinson, Dunelm's Chief Executive
Officer:
"We are pleased with our performance in the first quarter,
building on the strong growth delivered over the last year. Our
customers continue to respond well to our specialist product and
service offering and we are excited by the numerous opportunities
ahead of us.
"The launch of our new digital platform will be an important
milestone in this phase of Dunelm's development. Once fully live,
we can really begin to enhance and extend our offering and customer
experience.
"Despite the recent softness in the homewares market and the
increased political uncertainty, we are confident we can continue
to win market share and our expectations for the full year remain
unchanged."
(1) LFL stores: stores trading for at least one full financial
year prior to 30 June 2019 without any change of space. LFL store
revenues include Reserve & Collect sales and Home Delivery
sales in respect of orders placed via in-store tablets.
(2) Total LFL: LFL stores and Dunelm.com. The process for
obtaining a refund for online purchases in store has been changed
to minimise the risk of fraudulent returns. This process change has
increased the attribution of refunds to the online channel. Total
LFL is unaffected and therefore, as the business becomes more
multichannel, is a more meaningful measure of overall
performance.
(3) Non-LFL stores: new stores (including relocations) opened in
the current or previous financial year and existing stores with
significant change of space in the current or previous financial
year.
(4) Closed businesses: sales from Worldstores.co.uk and
Kiddicare.com. These websites were closed in Q1 FY19
Gross Margin
Gross margin improved by approximately 130bps in the first
quarter, mainly as a result of the lower levels of clearance stock
compared to the prior year and the continuation of sourcing gains.
For the full year, we expect gross margin to be consistent with
last year, with improvements in the first half likely to be offset
by FX headwinds towards the end of the financial year.
Financial Position
The Group continues to be highly cash generative. As at 28
September 2019, net debt was GBP24.0m (FY19: GBP109.0m) and weekly
average net debt during the quarter was GBP5m. The previously
announced special dividend and FY19 final ordinary dividend will be
paid during the second quarter.
Business development
We continue to test our new digital platform with a small
percentage of our customers and are pleased with the results to
date. We are planning to transfer all traffic to the new website
before Christmas but will retain flexibility within our transition
plans to ensure we provide the best experience for our customers
during the peak period.
As part of our focus on broadening and deepening our customer
base, during the quarter we launched the latest adverts in our Home
of Homes campaign, across TV, social and digital channels, with
real customers illustrating the breadth of our offering and our
customer base. We have also rolled out a new POS till system across
our store estate, improving the speed of service to our
customers.
We opened a new superstore in Boston, Lincolnshire in July,
which led to the closure of the two Boston high street stores. At
the end of the quarter, we had 170 superstores. We have acquired
the freehold of a new store at Cribbs Causeway in Bristol, which we
expect to open before Christmas.
Ends
For further information please contact:
Dunelm Group plc 0116 264 4439
Nick Wilkinson, Chief Executive Officer
Laura Carr, Chief Financial Officer
MHP Communications 020 3128 8789
Simon Hockridge / Tim Rowntree / Pete dunelm@mhpc.com
Lambie
Next scheduled events:
The Q2 trading update will be on 9 January 2020. The half year
results announcement will be on 12 February 2020.
Notes
1. Prior year quarterly sales analysis (Q1 FY19 included
Worldstores businesses in the total Group):
52 weeks to 29 June 2019
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales GBP248.2m GBP303.6m GBP551.8m GBP284.5m GBP264.1m GBP548.6m GBP1,100.4m
---------- ---------- ---------- ---------- ---------- ---------- ------------
LFL Stores growth 1.3% 7.8% 4.8% 9.8% 12.1% 10.9% 7.7%
---------- ---------- ---------- ---------- ---------- ---------- ------------
LFL Online growth 33.3% 37.7% 35.8% 32.1% 37.0% 34.6% 35.1%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total LFL growth 4.2% 10.8% 7.8% 12.5% 15.4% 13.9% 10.7%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total Dunelm growth 7.5% 9.6% 8.7% 12.4% 16.6% 14.4% 11.5%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total Group growth 0.1% 2.0% 1.2% 6.1% 11.6% 8.7% 4.8%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Gross margin growth +130bps +190bps +160bps +90bps +240bps +160bps +160bps
---------- ---------- ---------- ---------- ---------- ---------- ------------
Notes to Editors
Dunelm was founded in 1979 as a market stall business, selling
ready-made curtains. The first shop was opened in Leicester in 1984
and over the following years the business developed into a
successful chain of high street shops before expanding, following
the opening of the first Dunelm superstore in 1991, into broader
homewares categories. Dunelm is now a multi-channel retailer, with
Dunelm.com being launched in 2005 and the acquisition of the
Worldstores Group in 2016 accelerating this further.
Dunelm is market leader in the GBP13bn UK homewares market and
active in the GBP11bn UK furniture market. It currently operates
170 superstores, of which the majority are out of town and trades
online through dunelm.com. Dunelm employs approximately 10,000
colleagues and sells around 30,000 product lines in store,
increasing to around 55,000 online.
Dunelm, "The Home of Homes", offers a customer proposition of
style, value, quality and ease of shopping. From its textiles
heritage, in areas such as bedding, curtains, cushions, quilts and
pillows, Dunelm has broadened its product range to a complete
homewares offer including the likes of kitchenware, dining,
lighting, seasonal, wall art and rugs. Dunelm is one of the few
national retailers to offer an authoritative selection of curtain
fabrics on the roll and owns a specialist UK facility dedicated to
producing made-to-measure curtains and blinds.
The product range includes many exclusive, own brand designs and
owned premium brands such as Dorma and Fogarty. This is augmented
by a range of other well-known brands and license agreements.
Dunelm has been listed on the London Stock Exchange since
October 2006 (DNLM.L) and has a current market capitalisation of
approximately GBP1.6bn.
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END
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