Shares drop as hot summer hits same store sales at Dunelm Group

 
City A.M. Reporter
HOMEWARES retailer Dunelm Group reported a five per cent fall in first-quarter like-for-like sales yesterday as fewer people visited its stores during one of Britain’s hottest summers.

The company, which sells bedding, curtains, furniture and home utility items, said there was a significant decline in like-for-like sales in the first four weeks from 30 June.

Total sales rose 1.7 per cent to £154.3m in the quarter ended 28 September.

Peel Hunt analyst John Stevenson said the like-for-like sales decline was worse than anticipated, but was partially offset by higher gross margins.

Gross margin for the period rose about 70 basis points from a year earlier.

“If the shares react badly to today’s update, we see this as a clear buying opportunity for this well managed, high growth and cash generative retailer,” Stevenson wrote in a note to clients.

Cantor Fitzgerald analyst Freddie George reiterated his ‘buy’ recommendation on the stock saying he expects sales to recover in the second quarter.