Dunelm Group PLC (LON:DNLM) said it expects full year profit to be at upper end of its previous guided range, after the homewares retailer enjoyed an easier fourth quarter.
Total revenue for 13 weeks to end-June was up 15.4% on a like-for-like basis thanks to strong underlying growth in stores and online, together with an easier comparison against a weak period last year.
READ: Dunelm raises profit expectations after strong end to the year
For the full year, Dunelm said it now expects profit before tax to be towards the upper end of the range of £124mln-£126mln guided last month, compared to £102mln last year.
Chief executive Nick Wilkinson said: “We continue to invest in the business, particularly in strengthening our digital capabilities and reaching more customers through our brand marketing initiatives.”
Looking forward, he said as the UK's largest homewares retailer, the company sees “significant opportunity for continued growth both from our stores and online”.
In the short-term, while he was cautious about the uncertain political climate and the impact it may have on consumer spending, he expect to make “further progress in the year ahead”.
Special dividend in store
Broker Peel Hunt said Dunelm has enjoyed the double whammy of favourable wet weather this year against a weak performance blamed on last year's heatwave, making "fairly exceptional" in-store LFL sales gains.
With a surprise drop in year-end net debt to just £25.3mln from £124mln a year ago, benefitting from an element of working capital timing, the broker said this means an autumn special dividend "looks highly likely".
Hannah Thomson, senior retail analyst at GlobalData, said investment in marketing and increased brand recognition from sponsoring ITV's Good Morning programme meant that Dunelm was grabbing spend from homewares shoppers who are deserting John Lewis, where sales of homewares and furniture have fallen 4% since the start of February, and other troubled department stores such as Debenhams and House of Fraser.
The coming year will present a sterner test, she said, as Dunelm annualises a stronger performance of its core business.
Dunelm shares made an early spike on Wednesday morning but were flat at 887p after almost an hour and half of trading.
-- Adds broker comment and share price --