Home goods retailer Dunelm (DNLM) has reported slowing sales growth between its first and second quarter. Underlying sales grew by 9.3 per cent during the opening period, but by just 3.4 per cent in the second. Total revenues managed a 13.6 per cent improvement to £298m, 16 per cent of which came from online sales.
That's not abismal given the current consumer climate, but these numbers don't align with the optimistic tone struck in the wake of last year’s final results. Chairman Andy Harrison said in September that, over the medium term, the company wanted to “double sales to £2bn”, with 30 to 40 per cent of these completed online. While the end of the year may well see a higher proportion of sales coming from the website, it’s clear the company has a way to go to meet these targets. Further pain lies in the gross margins, which fell by 180 basis points. This was the result of the recent Worldstores acquisition (sales from which are lower margin) and expedited clearance of end-of-season stock.
That said, increasing sales isn't an unrealistic goal. Five new stores opened during the second quarter, making a net total of nine new stores opened during the first half. This helped push total interim sales up by nearly a fifth. No more stores are due to open this financial year, which might help bring down near-term expenditure too.
