Like-for-like sales at the homeware retailer in the three months ended 30 March climbed 12.5%, driven by a 32.1% jump in like-for-like online revenue and a 9.8% rise in like-for-like store sales. That means total like-for-like sales are up by two-thirds so far this year.
Improved sourcing and the “positive impact” of closing the Worldstores businesses helped boost margins by 90 basis points, and that figure is expected to continue to rise throughout the final quarter.
Analysts currently expect Dunelm to post a pre-tax profit of between £115.6-118.5mln this year, but the company is guiding for the actual number to be slightly higher than the top of the range.
“Political and economic uncertainty remains heightened as we enter the final quarter of our financial year,” read Wednesday’s trading update.
“However, if there are no significant changes to current trends in consumer demand, we expect to report full-year profit before tax slightly ahead of the top of the range of current analysts' forecasts.”
In a bid to keep up with the times, Dunelm has been improving its digital capabilities such as click and collect and its website, while shoppers can now also use in-store tablets to place orders.
The FTSE 250 group said the changes had gone down well with customers and that it is looking to increase its investment in digital technologies as it adapts to a “dynamic retail climate”.
Bosses added they would also spend more money on marketing, having recently agreed to sponsor ITV’s flagship daytime TV show This Morning.
‘More customers want to shop at Dunelm’
“We are delighted that customers continue to respond well to our improving homewares offer as we help them create a home they love,” said chief executive Nick Wilkinson.
“The strong growth in the third quarter reflects our ongoing focus on attracting more customers to the brand and giving them more reasons to shop with us through great product and service. Our performance was also buoyed by a positive homewares market.
“Our multichannel proposition is improving all the time and we are excited about the opportunities ahead of us as we continue to invest in and develop our digital capabilities.”
Dunelm shares rose 2.3% to 885p on Wednesday morning.