Dunelm’s Share Price Fell 2.37% on Its Mixed Half-Year Results

The Dunelm Group plc (LON: DNLM) share price fell 2.37% after disclosing its half-year results for the 26 weeks ended 30 December 2023. The premier homewares retailer in the UK revealed that it recorded a robust sales increase of 4.5%, with total revenue rising to £872 million, compared to £835 million in the first half of the previous fiscal year.

The company achieved market share growth in both the homewares and furniture sectors, marking an overall gain of 50 basis points. It also saw a 4.2% rise in active customers, coupled with a higher rate of transactions.

Digital sales continued to expand, constituting 36% of overall sales (up from 34% in the first half of the previous fiscal year). Its enhanced product offerings have led to growth across various categories and sales channels. The company also expanded the retail network by opening four new stores, bringing the total to 183.

The company updated its marketing strategy, introducing the ‘Home of Homes' brand initiative. Through the ‘Delivering Joy' campaign, the firm donated over 125,000 Christmas gifts to local charities, doubling the contributions from the previous year.

Dunelm remains committed to long-term investments in store expansions, branding efforts, and digital advancements.

The homeware retailer’s gross margin improved by 160 basis points due to strategic promotional activities while ensuring value. Managed operational expenses effectively, mitigating inflationary pressures through efficiency improvements.

The firm’s profit before tax rose by 4.8% to £123 million (up from £117 million in the first half of the previous fiscal year). It generated a robust free cash flow of £91 million (compared to £102 million in the previous period).

The company increased the interim dividend to 16p (up from 15p), a 7% rise. It also announced a special dividend of 35p to adjust the net debt: EBITDA ratio to the targeted range of 0.2× – 0.6×. Dunelm’s current outlook shows that trading has been positive in the latter half of the fiscal year.

Despite a resilient customer base, the future consumer market outlook remains uncertain. The company continues to focus on broadening its appeal and maintaining operational efficiency. Profit before tax expectations for the entire year are consistent and align with current market projections.

Dunelm share price. 

The Dunelm share price fell 2.37% to trade at 1052.5p from Tuesday’s closing price of 1078.0p.