TIDMDNLM
RNS Number : 6795V
Dunelm Group plc
10 April 2019
10 April 2019
Dunelm Group plc
Third 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 30 March 2019.
Revenue
Total like-for-like (LFL) revenue for the third quarter
increased by 12.5%, a strong result that continues the growth trend
from the first half of the year.
- LFL store revenue increased by +9.8% year-on-year
- LFL online revenue on Dunelm.com continued to grow strongly in the quarter by +32.1%
- Total multi-channel revenue for the quarter, defined as LFL
online revenue plus Reserve & Collect and tablet-based selling
in-store, represented 18.5% of revenue, an increase of +4.1ppts
year on year.
Total Group revenue was GBP284.5m, up +6.1%, reflecting the
closure of the Worldstores and Kiddicare websites earlier in the
financial year.
13 weeks to 30 March 2019 39 weeks to 30 March 2019
Revenue YoY Growth YoY Growth Revenue YoY Growth YoY Growth
(GBPm) (GBPm) (%) (GBPm) (GBPm) (%)
-------- ----------- ----------- -------- ----------- -----------
LFL Stores(1) 225.9 +20.1 +9.8% 678.2 +40.7 +6.4%
-------- ----------- ----------- -------- ----------- -----------
LFL Online - Dunelm.com(2) 38.7 +9.4 +32.1% 101.2 +25.9 +34.4%
-------- ----------- ----------- -------- ----------- -----------
Total LFL 264.6 +29.5 +12.5% 779.4 +66.6 +9.3%
-------- ----------- ----------- -------- ----------- -----------
Non-LFL Stores(3) 19.9 +1.9 - 53.3 +8.5 -
-------- ----------- ----------- -------- ----------- -----------
Total Dunelm 284.5 +31.4 +12.4% 832.7 +75.1 +9.9%
-------- ----------- ----------- -------- ----------- -----------
Non-LFL Online - Worldstores(4) 0.0 -15.0 - 3.6 -52.4 -
-------- ----------- ----------- -------- ----------- -----------
Total Group 284.5 +16.4 +6.1% 836.3 +22.7 +2.8%
-------- ----------- ----------- -------- ----------- -----------
1. LFL Stores - stores trading for at least one full financial
year prior to 1 July 2018 without any significant change of space.
LFL stores revenues include Reserve & Collect sales, and home
delivery sales in respect of orders placed via in-store tablets
2. LFL Online - Dunelm.com (excludes Reserve & Collect
sales, and home delivery sales in respect of orders placed via
in-store tablets)
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. Non-LFL Online - Worldstores.co.uk, Kiddicare.com and
Achica.com (these websites are now closed)
Gross Margin
Gross margin increased by approximately 90bps at Group level
compared with the third quarter last year. The margin improvement
was driven by the positive impact of closing the dilutive
Worldstores businesses and an increase in the core business margin
of approximately 40bps, driven by improved sourcing.
In the final quarter, we expect our gross margin to continue to
improve year on year, in part reflecting the high level of obsolete
stock provisioning in the comparative period last year.
Business Update
As we enter the Spring/Summer season we continue to focus on
delivering excellent retail operations in our core business.
Additionally, as part of our drive to reach more customers with our
brand, we have launched the fourth Home of Homes campaign, across
multiple media channels including TV, and we are now sponsoring
ITV's flagship 'This Morning' programme (our 12-month partnership
commenced on 1 March 2019).
Digital technology, including tablet-based selling in stores,
has improved our experience for customers and we continue to invest
in building our digital capabilities. We remain on track with the
phased implementation of our new digital operating system. We are
excited about the opportunities that will come with the full launch
of the new systems, but will proceed carefully, mindful that we
must minimise disruption to the strong growth trend we are seeing
on our existing online platform.
There have been no changes to our store footprint during the
quarter (169 superstores). We expect to open two new stores
(including one relocation) towards the end of the financial
year.
Financial Position and Outlook
As at 30 March 2019, net debt was GBP48.3m (FY18: GBP123.8m) and
weekly average net debt during the year to date was GBP62.2m.
Against the backdrop of a dynamic retail climate, we have chosen
to increase our investment in the business, specifically in the
areas of technology and marketing as described above, to drive
future profitable growth. Furthermore, as a result of improved
financial performance, we expect full year performance incentives
will pay out at a higher level across the business. These factors
will result in the second half operating cost to sales ratio being
slightly higher than the same period last year.
Political and economic uncertainty remains heightened as we
enter the final quarter of our financial year. However, if there
are no significant changes to current trends in consumer demand, we
expect to report full year profit before tax slightly ahead of the
top of the range of current analysts' forecasts(1) .
Comment from Nick Wilkinson, Dunelm's Chief Executive:
"We are delighted that customers continue to respond well to our
improving homewares offer as we help them create a home they love.
The strong growth in the third quarter reflects our ongoing focus
on attracting more customers to the brand and giving them more
reasons to shop with us through great product and service. Our
performance was also buoyed by a positive homewares market.
"Our multichannel proposition is improving all the time and we
are excited about the opportunities ahead of us as we continue to
invest in and develop our digital capabilities."
Ends
[1] Management understand that latest analysts estimates for
FY19 reported PBT are in the range of GBP115.6m - GBP118.5m.
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 Q4 trading update is scheduled for 10 July 2019, with
announcement of the full year results for the year ending 29 June
2019 scheduled for 4 September 2019.
Notes
1. Quarterly sales and margin analysis (totals include Worldstores):
52 weeks to 29 June 2019
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- ---------- --- --- ---
Total sales GBP248.2m GBP303.6m GBP551.8m GBP284.5m
---------- ---------- ---------- ---------- --- --- ---
LFL Stores growth 1.3% 5.7% 3.8% 9.8%
---------- ---------- ---------- ---------- --- --- ---
LFL Online growth 33.3% 37.9% 35.8% 32.1%
---------- ---------- ---------- ---------- --- --- ---
Total LFL growth 4.2% 9.0% 6.9% 12.5%
---------- ---------- ---------- ---------- --- --- ---
Total Dunelm growth** 7.5% 9.6% 8.7% 12.4%
---------- ---------- ---------- ---------- --- --- ---
Total Group growth 0.1% 2.0% 1.2% 6.1%
---------- ---------- ---------- ---------- --- --- ---
Gross margin growth* +130bps +190bps +160bps +90bps
---------- ---------- ---------- ---------- --- --- ---
52 weeks to 30 June 2018
Q1 Q2 H1 Q3 Q4 H2 FY
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total sales GBP247.9m GBP297.5m GBP545.4m GBP268.2m GBP236.5m GBP504.7m GBP1,050.1m
---------- ---------- ---------- ---------- ---------- ---------- ------------
LFL Stores growth 6.5% 1.1% 3.5% 1.2% -4.6% -1.6% 1.0%
---------- ---------- ---------- ---------- ---------- ---------- ------------
LFL Online growth 46.2% 30.5% 36.8% 35.7% 41.8% 38.7% 37.9%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total LFL growth 9.3% 3.4% 6.0% 4.6% 0.1% 2.4% 4.2%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total Dunelm growth 14.3% 9.4% 11.4% 9.0% 3.7% 6.4% 8.9%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total Group growth 24.8% 13.6% 18.4% 5.1% -1.4% 1.9% 9.9%
---------- ---------- ---------- ---------- ---------- ---------- ------------
Gross margin growth -220bps -155bps -180bps -15bps -50bps -20bps -90bps
---------- ---------- ---------- ---------- ---------- ---------- ------------
* Estimated Group margin growth
** Total Dunelm growth in Q1 has been restated to 7.5% (from
5.8% as previously reported) due to a sales reclassification
between non-LFL stores and non-LFL online categories
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
171 stores, of which 169 are out-of-town superstores and two are
located on high streets, and also trades online through Dunelm.com.
Dunelm employs approximately 10,000 colleagues and sells around
30,000 product lines in store, increasing to around 60,000
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 GBP1.8bn.
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END
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