Dunelm ups profit outlook again as weather boosts sales

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Dunelm has upped its profit outlook again (Mike Cook/PA)

Homeware retailer Dunelm has upped its profit outlook for the second time in as many months after weather helped boost sales.

The group said it had seen “very good” like-for-like sales growth since its third quarter update on April 10, particularly in May and June.

It cited weaker comparative trading from a year earlier – when sales edged just 0.1% higher – and “unseasonably favourable weather conditions this year”.

The group now expects full-year pre-tax profits of between £124 million and £126 million.

This compares with £93.1 million last year.

Shares lifted nearly 6% after the profit cheer.

Dunelm has enjoyed a bumper financial year so far, with like-for-like sales up 12.5% in the third quarter.

It has been driving sales in the spring/summer season, partly through its new advertising campaign which includes a sponsorship deal with ITV’s This Morning.

The group’s garden ranges, including llama and flamingo lawn ornaments, has also proved a hit with customers as it gears up for the summer season.

Shares have risen nearly 70% this year as chief executive Nick Wilkinson has been leading a push to boost results, closing under-performing Worldstores and improving sourcing to increase profit margins.

Dunelm was founded in 1979 as a market stall business, selling ready-made curtains.

It opened its first shop in Leicester in 1984 and now has 171 stores nationwide and around 10,000 staff.

Emma-Lou Montgomery, associate director at Fidelity Personal Investing’s share dealing service, said: “The dismal summer weather so far has also encouraged stay-at-homes to beautify their nests and given Dunelm, the self-styled ‘home of homes’,  good like-for-like growth, in May and June in particular.”

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