Dunelm Group PLC (LSE:DNLM)’s share price received a lukewarm reception today despite the retailer delivering “record” revenue and profit before tax (PBT) that came in ahead of market expectations for the year.
The homeware retailer delivered £192.7 million of pre-tax profit in the fiscal year ending in July 2023, it said in its preliminary results, which was 7.8% less than a year earlier but still ahead of market expectations.
This was on the back of almost £1.64 billion of sales, 5.5% more than it made a year earlier, as the company grew its customer base by 2.8%.
Dunelm said its digital turnover improved one percentage point to 36% in fiscal 2023, during which it also opened three new stores including one relocation.
It said it expected further “sales and PBT growth” in 2024, driven by volume.
However, its share price remained flat this morning, on the back of the results announcement, with shares dipping 0.65% by mid-morning.
In July, Dunelm raised its profit expectations for the year following a "robust" final quarter in which it generated £381 million of sales, a 6% increase on the equivalent part of 2022.
At the time, the retailer guided for pre-tax profit that would beat market expectations from analysts estimating it would earn around £188 million of profit before tax for the year.
Dunelm’s chief executive Nick Wilkinson said: "We are excited about our future growth opportunity and more confident than ever that our commitment to value and tireless focus on improving the experience for our home-loving customers will leave us well placed to deliver sustainable growth in the future."
Stockbroker Peel Hunt said that while Dunelm did not unveil a new special dividend, after revealing a 40p dividend earlier this year, the "strength of the balance sheet" means it is likely to announce a new special dividend in the February interim period.
Its analysts recommended buying the retailer's shares at a target price of 1,375p per share, after it came "slightly ahead" of its upgraded forecast and consensus expectations, citing "continued market share gains".