Dunelm share price drops as the homeware chain blames the weather for disappointing Christmas sales

 
Kasmira Jefford
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Dunelm is aiming for 200 stores in the UK, with six openings a year (Source: Dunelm)

Dunelm's share price has tumbled nearly five per cent after the homeware chain blamed the warm winter weather for disappointing second quarter sales, placing it among the retail losers this Christmas.

The family-owned listed company, which has 151 stores selling everything from curtains to sofas, said like-for-like sales slid by 0.8 per cent in the 13 weeks to 2 January after stripping out the impact of six extra days of winter sale this year that boosted sales to the tune of £10m.

When including the extra days, like-for-like sales rose by 2.6 per cent, with total sales up 3.9 per cent.

Dunelm said fewer visitors made trips to its stores due to the mild weather, with footfall down around three per cent in the quarter. However customers continued to flock online to buy new products for their homes, boosting home delivery sales by 23.4 per cent.

"These trading numbers are a reasonable outcome given the unseasonably warm weather. We have had a very strong sale after Christmas and we expect further good progress in the second half," chief executive John Browett said.

Dunelm's performance disappointed the City, especially given recent industry figures released by the British Retail Consortium, which suggested that furniture and homeware retailers had enjoyed a strong Christmas thanks to the buoyant housing market.

But analysts expect a bounce back this year, as the company steps up its expansion under Browett, who took over the reins at the start of the year.

"Given Dunelm is already on an expansion path to grow market share through like-for-like sales, online and around six new stores per year we expect a similar, if perhaps accelerated, strategy from Browett," Jefferies analyst Caroline Gulliver said.

Peel Hunt's John Stevenson added: "While this is a disappointing sales blip which is likely to hit the shares, we would view any material share price weakness as a good buying opportunity for this long term sector winner."

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