viewDunelm Group PLC

Dunelm spending £150,000 per week to operate within social distancing rules

The furniture retailer remains cautious given the ongoing uncertainty around the pandemic

Dunelm Group plc - Dunelm to spend £150,000 per week to operate with social distancing measures

Dunelm Group plc (LON:DNLM) said operating with social distancing measures is expected to cost it £150,000 per week in the short-term.

The furniture retailer saw a recovery in sales after stores reopened but said it remains cautious given the ongoing uncertainty around Covid-19, despite the homewares market proving to be "relatively resilient".

READ: Next and Dunelm cut to ‘sell’ as Citi warns retailer rebound underestimates demand slump

Sales in the quarter to June 30 fell 29%, with a progressive improvement from a 78% crash in April to a 20% jump in June, which Dunelm attributed to pent-up demand and the delayed start to the summer sale. Online sales rocketed 105% in the quarter.

Revenue for the year to June dipped 4% to £1bn, while profit before tax is expected to come in at £105-£110mln compared to £126mln a year ago.

As of June 27, net debt was £35mln. The group has access to state support under the COVID Corporate Financing Facility but does not intend to draw down on it.

"It’s important we don’t get carried away by the strong bounce back in sales over June," analysts at house broker Peel Hunt commented.

"Still... consumers are clearly prioritising home spend. We think this is accelerating Dunelm’s transition to a digital-led business model as actives and spending levels rise. We see Dunelm taking market share as competitors contract and fail."

Shares added 1% to 1,161p early on Wednesday.

--Adds analyst comment, shares--

Quick facts: Dunelm Group PLC


Price: 1462 GBX

Market Cap: £2.96 billion

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