LFL sales growth eases at Dunelm

After a decent start to the year things got tougher in February and March at home-ware retailer Dunelm, with like-for-like (LFL) sales growth slowing during the quarter.

Total sales in the first quarter of 2012 came in at £154.1m, giving total sales growth over the equivalent period of 2011 of 10.7%, but that figure included contributions from stores opened over the previous 12 months by the fast growing bedding, curtains and cushions seller. Stripping out new stores, LFL sales at Dunelm were 0.6% ahead of the same period of 2011.

In the nine months to the end of March LFL sales were ahead by 1% on the prior year, with total sales at £454m. That is a slight easing on the 1.1% LFL sales growth rate seen at the halfway point of the group's financial year.

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The company said trading conditions were "challenging". The stores did well in January but footfall was depressed in February and March.

Gross margin increased by 30 basis points (three-tenths of a percentage point) over the equivalent three-month period of 2011. Dunelm says for the full year margins will be 20 basis points better than in fiscal 2011/12.

Two stores were opened between January and March (including one relocation). Over the full financial year Dunelm expects to open 15 new stores (including two relocations).

Nick Wharton, Chief Executive, commented: "Our focus on the development of our Simply Value for Money proposition and growth both through new stores and through our multi-channel offering has seen Dunelm achieve a solid sales performance in what remains a very demanding retail environment.

He added though that: "It is prudent to remain cautious about the wider economy".

Dunelm has been an impressive performer on the FTSE 250, gaining 18% in the last 12 months.

BS