Dunelm welcomes ‘strong’ H1 as online sales soar

Dunelm has welcomed a “strong” performance in its half-year results, with pre-tax profit soaring 34.4% to £112.4m in the period ended 26 December 2020.

Despite ongoing store closures in light of the pandemic, total sales rose by 23% to £719.4m in H1, up from £585m the same period the year prior. 

This was largely driven by the retailer’s online sales, which surged by 111% in the period as more customers turned to online shopping amid the pandemic. Digital sales accounted for 35% of sales in total, having accounted for only 20.4% of sales in FY20 H1. 

To support this online boom, the group notes it has made progress with the ongoing development of its digital capabilities, and has scaled its technology and operations to respond to online growth in peak volumes.

In addition, analysis conducted by the retailer found that the homewares market grew by 9.7% in the period, reflecting strong consumer demand, and for comparable categories, its growth for the period was 21%. 

During the weeks when its store estate was fully open, it “significantly outperformed” the market, but performed below the market in weeks impacted by store closures, as other retailers selling homewares were classified as essential and remained open.

According to chairman Andy Harrison, however, the group’s board has now declared an interim dividend of 12 pence per share, reflecting the “strong performance” in the first half of the year and Dunelm’s “confidence in the medium-term outlook”.

CEO Nick Wilkinson said: “In light of another strong performance, I would like to express my sincere thanks to the whole Dunelm team, and our committed suppliers, who have continued to work tirelessly throughout these extraordinary times to ensure the highest safety standards for ourselves and our customers, and also for their dedication and commitment to continuing to improve our customer proposition.

“Sales were particularly strong in the first quarter, before we had to navigate the various restrictions which impacted the remainder of the period.” 

He added: “These restrictions have become more severe in the second half of our financial year, with all but one of our stores currently closed, although we continue to serve customers through our digital channels, which have significantly advanced during the last year. 

“Beyond the near-term uncertainty, we have never been more confident about the future. Dunelm is a market leader with a challenger brand mentality, in a large and growing segment. We have a clear runway to grow active customers and their frequency across our total retail system and to realise our long-term ambitions.”