The troubles faced by Dunelm (DNLM) in 2016 appear to be firmly a thing of the past. The homewares retailer reported a strong fourth quarter, with total like-for-like sales up 15.4 per cent to £245m. This growth came from both online and stores, with increases of 37 per cent and 12.1 per cent, respectively. Full-year pre-tax profit is expected to be in the upper end of the £124m to £126m range.
Net debt of £25.3m was “lower than expected” thanks to higher operating profits, positive working capital management and the timing of capital investment at the year-end. Gross margin benefited from a lower proportion of sales coming from lower-margin Worldstores businesses, as well as better sourcing and a lower level of clearance, resulting in a 240-basis point improvement at the group level.