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Dunelm Q3 LFL Revenue Up, Sees FY Profit Slightly Ahead Of Market View; Stock Up

(RTTNews) - Shares of Dunelm Group plc (DNLM.L) were gaining around 5 percent in the early morning trading in London after the homewares retailer reported Wednesday that its total like-for-like or 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.

Total Group revenue was 284.5 million pounds, up 6.1% from last year, reflecting the closure of the Worldstores and Kiddicare websites earlier in the financial year.

In its trading update for the 13-week period ended March 30, the company noted that LFL store revenue increased 9.8% year-on-year, and 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 4.1 ppts year on year.

Gross margin increased by approximately 90bps at Group level compared with the third quarter last year.

In the final quarter, the company expects 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.

As a result of improved financial performance, the company expects 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," the company said.

In London, Dunelm shares were trading at 904.16 pence, up 4.53 percent.
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