Shares in Dunelm dropped more than eight per cent this morning despite reporting growth in the first quarter, following a string of positive trading updates this year.
Total like for like revenue grew 6.4 per cent to £255.6m, with a 34.7 per cent increase in online sales. In-store revenue was up 2.9 per cent to £219.9m.
Analysts said the share price slump could be attributed to the fact that the retailer’s strong performance so far this year has already been priced into the market.
The homewares store also warned that the weakening pound could have a negative effect on margins towards the end of the financial year.
However, the company said it remains confident in its ability to capture market share and said expectations for the year are unchanged despite “increased political uncertainty”.
Russ Mould, investment director at AJ Bell, said: “Dunelm’s first quarter trading update didn’t receive the kind of reception management may have expected.
“The home furnishings chain defied retail gloom to post a series of positive trading updates earlier in 2019 but the stalling share price suggests the strong performance has already been priced in by the market.”
He added: “Now the easy wins have been achieved, chief executive Nick Wilkinson faces the task of steering the group through what could be an increasingly testing period.”
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