TIDMDNLM
RNS Number : 1319C
Dunelm Group plc
15 October 2020
15 October 2020
Dunelm Group plc
First quarter trading update
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading
homewares retailer, reports on trading for the 13-week period ended
26 September 2020.
Q1 FY21 Q1 FY20 YoY
Total sales GBP359.1m GBP262.6m +36.7%
---------- ---------- ----------
Digital % total sales(1) 29.7% 17.6% +12.1%pts
---------- ---------- ----------
(1) Digital includes home delivery, Click & Collect
(previously Reserve & Collect) and tablet-based selling in
store
Revenue
Total sales in the quarter were GBP359.1m, an increase of
GBP96.5m year over year, as we continue to win market share in a
buoyant homewares market. We announced at the start of September
that trading in the first two months of the financial year had been
materially ahead of our initial expectations. This trend has
continued, with the final month of the quarter also being very
strong. We have delivered meaningful growth across our total retail
system, with online (home delivery) sales growth continuing at the
levels previously reported, and strong growth in stores.
Gross margin
Gross margin increased by 100bps compared to Q1 FY20, mainly due
to a lower proportion of discounted sales, reflecting strong
demand, as well as sourcing improvements. For the full year, we
expect gross margin to be slightly positive year over year, barring
any material further impacts as a result of Covid-19 related
disruption or restrictions.
Financial position
Net cash was GBP175.2m as at 26 September 2020 (FY20: net debt
GBP24.0m). As previously highlighted, the FY20 cash position
benefited from approximately GBP80m of exceptional working capital
inflows. As at the end of the first quarter, only a small
proportion of those working capital inflows had reversed and
additionally the cash balance was flattered by the timing of the
September month end payment run of approximately GBP60m, which was
paid at the start of the second quarter.
Operations and strategic update
We continue to monitor the current guidance relating to Covid-19
carefully, with colleague and customer safety being our priority.
At the time of writing, we have not experienced any significant
disruption from the various regional restrictions that have been
introduced across the country; however, we recognise that the
situation remains dynamic with a number of ongoing risks and
uncertainties. We remain focused on ensuring that our stores and
operations provide a safe and welcoming environment.
Since year-end, we have opened two new stores, both of which are
relocations, in Sunderland and Clydebank. As well as improving our
customer experience, we continue to make progress on reducing the
impact of our store estate on the environment, with both stores
being heated by efficient heating systems powered by 100% renewable
electricity. The stores are fully LED-illuminated, in line with the
rest of the estate.
We continued to refine and add functionality to our digital
offering and platform during the quarter, with new customer
features such as product recommendations and 'track my order'. We
have also increased capacity in home delivery fulfilment and
warehousing ahead of our peak trading season.
As a result of the recent strength in performance, the Board has
decided that it will repay the monies received under the Job
Retention Scheme ("JRS") in FY20, provided there is no further
material Covid-19 related impact during the winter months. The JRS
claims for FY20 totalled GBP14.5m. As noted previously, we have not
claimed any monies under the JRS in FY21 and will not claim the JRS
"bonus" announced by the Chancellor.
Outlook
The homewares market continues to be resilient and we are
materially outperforming the market. Trading in the first quarter
was significantly ahead of our expectations and current trading
remains very robust.
However, given the significant uncertainty relating to further
Covid-19 restrictions and the implications for the economic
outlook, at this early point in the financial year, the range of
potential outcomes for FY21 is unusually wide and we are therefore
unable to provide any meaningful guidance.
Whilst acknowledging the potential macro headwinds, we remain
confident that the strength of our proposition, coupled with the
skills and commitment of our colleagues, will enable us to
successfully navigate the months ahead.
Comment from Nick Wilkinson, Dunelm's Chief Executive
Officer:
"We are really pleased with our very strong performance in the
first quarter, with customers responding well to the Dunelm offer
across all product categories, both in-store and online.
"Recent months have seen homewares become even more relevant, as
people spend more time in their homes up and down the country. Our
colleagues and suppliers have worked really hard to ensure our
value focused, market leading proposition resonates with customers.
The strength in trading at this early point in the year is
testament to their exceptional commitment and adaptability.
"While we remain cautious about the continued uncertainty in the
wider market, the resilience and flexibility of our business model
leaves us well positioned as we enter our peak trading period and
we remain confident in our ability to grow market share and help
even more customers create a home they love."
For further information please contact:
Dunelm Group plc investorrelations@dunelm.com
Nick Wilkinson, Chief Executive Officer
Laura Carr, Chief Financial Officer
07585 301464 / 07710
MHP Communications 032657
Simon Hockridge / Rachel Mann / Pete Lambie dunelm@mhpc.com
Next scheduled event:
Dunelm will release its second quarter trading update on 14
January 2021. The half year results announcement will be on 10
February 2021.
Quarterly analysis:
52 weeks to 26 June 2021
Q1 Q2 H1 Q3 Q4 H2 FY
---------- --- --- --- --- --- ---
Total sales GBP359.1m
---------- --- --- --- --- --- ---
Total LFL growth(2) 35.7%
---------- --- --- --- --- --- ---
Total Group growth 36.7%
---------- --- --- --- --- --- ---
Gross margin improvement +100bps
---------- --- --- --- --- --- ---
52 weeks to 27 June 2020
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales GBP262.6m GBP322.4m GBP585.0m GBP284.4m GBP188.5m GBP472.9m GBP1,057.9m
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total LFL growth(2) 6.4% 5.0% 5.6% -1.3% -29.0% -14.6% -4.5%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total Group growth 5.8% 6.2% 6.0% 0.0% -28.6% -13.8% -3.9%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Gross margin improvement +130bps +110bps +120bps +130bps -210bps +0bps +70bps
---------- ---------- ---------- ---------- ---------- ---------- ------------
2 Total LFL: LFL stores and online (home delivery). LFL stores
are those stores trading for at least one full financial year prior
to 27 June 2020 without any significant change of space. LFL store
revenues include Click & Collect / Reserve & Collect sales
and home delivery sales in respect of orders placed via in-store
tablets
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.
Dunelm is market leader in the GBP14bn UK homewares market and
active in the GBP12bn UK furniture market. It currently operates
173 stores, of which the majority are out-of-town, and trades
online through dunelm.com . Dunelm employs approximately 10,000
colleagues and sells approximately 50,000 product lines (including
store and online exclusives).
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 licence agreements.
Dunelm has been listed on the London Stock Exchange since
October 2006 (DNLM.L) and has a current market capitalisation of
approximately GBP3.2bn.
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