Dunelm Group PLC (LSE:DNLM) results may have given us an indication of what to expect from John Lewis when it releases its half-year results tomorrow.
Albeit the publicly listed company operates in a slightly different market in terms of cost, both are powerhouses in the homeware sector.
Interim results from John Lewis should give us a better indication of the state of the homeware market.
And even if it is looking at ways to diversify, including becoming a landlord and a financial adviser and is not a listed company, it is a bellwether for the wider retail industry and often provides interesting insights that can hit quoted sector peers.
What did Dunelm say?
Dunelm's full-year numbers contained a sprinkle of the good, the bad and the ugly.
Profits and revenues were up in the year to 2 July, 32% and 16% respectively.
However, a quick glance at its share price, which has nosedived 46% in the year to date, would suggest investors have priced in a downturn in trading.
The outlook did little to quash those investor fears.
Although management is confident of achieving analyst expectations of £178mln profit before tax, with the upper end at £190mln, that would represent a reduction on the profit seen in the past year.
As the cost-of-living crisis continues to bite, it “seems likely sales will eventually suffer as people wait a bit longer to replace that duvet set or pair of curtains,” said Russ Mould, investment director at AJ Bell.
What to expect from John Lewis tomorrow?
Uncertainty and cost of living dominated the retailer’s outlook in its full-year results released in March.
In an effort to tackle that, the company said it will be investing £500mln into “everyday quality and value” for John Lewis customers.
What this means remains to be seen after the company ditched its ‘never knowingly undersold’ scheme earlier this year.
Aiming to price match competitors, fulfilling its famous slogan often turned out to be a costly initiative when competitors like Debenhams would run fire sales to try and keep afloat, with some figures also suggesting only 1% of customers took advantage of the offer.
Now, John Lewis has a new strapline of ‘For All Life’s Moments.’
And it isn’t just in its slogan where a major shake-up is occurring, with full-year results also due to reveal more of its progress on its property rental proposition, where the group is looking to build homes on top of its Waitrose stores, including in Bromley and West Ealing.