Dunelm's share price jumps after bounce back in sales

 
Kasmira Jefford
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The homeware chain wants to grow from 152 to 200 UK stores (Source: Dunelm)

Dunelm shares rallied today after the out-of-town homeware giant posted a bounce back in sales in third quarter following a disappointing start to the year.

The retailer grew sales by 5.9 per cent to £229m in the 13 weeks to 2 April, while like-for-like sales – including home delivery – increased by 1.1 per cent.

That contrasted with the previous quarter, when Dunelm blamed the warm winter weather for the drop in visitors coming to its stores. When stripping out the six extra days of winter sales, underlying like-for-like sales has fallen by 0.8 per cent.

Shares closed up 4.2 per cent at 948.5p, with investors already cheered after the company declared a £63.9m special dividend last month.

"We have enjoyed a good Easter, are looking forward to a successful final quarter and are confident of achieving our expectations for the full year," chief executive, John Browett, said.

The former Dixons Retail and Monsoon boss, who took over the reins at the start of the year, recently set out detailed plans for growing the business including growing its home delivery business, expanding its presence in London and the south east and improving it store formats as well as its supply chain.

It currently has 152 so-called superstores and has committed to another five openings, which are likely to take place in the next financial year.

Peel Hunt analyst John Stevenson left his "add" rating and full-year adjusted pre-tax profit forecast unchanged at £129.9m. He said: "It’s still relatively early days for the new management team and Dunelm has hardly struggled to outperform the sector in the past.

"Nonetheless, while the group has excelled at driving market share and creating a compelling consumer proposition, there is an opportunity to bring in elements of industry best practice to both improve efficiency and drive sales."

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