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Dunelm reports a disappointing Q1 due to "unusually warm weather"

Published: 6 October 2016 - Jenny Wonnacott

Homewares retailer Dunelm Mill  has reported a year-on-year loss of -7.3% with like-for-likes down by 3.8% for the 13 weeks ending October 1.

Warm weather drew customers away from homewares shopping this last quarter, according to Dunelm
Warm weather drew customers away from homewares shopping this last quarter, according to Dunelm

Total revenue fell by 1.8% to £198.7m, which the retailer put down to "unusually warm weather [having] a dampening effect on store footfall." The business did, however, see good growth in online sales, including a 17.9% increase in home delivery sales. Bosses said that, overall, they still felt they were outperforming the homewares market as a whole.

Gross margin was estimated to be broadly flat when compared to the same quarter last year. As yet, the retailer revealed it has "not seen any material impact from adverse foreign exchange markets in relation to goods sourced directly or from third parties."

Net debt as of October 1 was approximately £83m, with daily average net debt for the period amounting to £76.5m.

Said Dunelm chief executive John Browett: " As expected, the homewares market has fallen due to unusually warm weather and this has correspondingly impacted our store performance over the period given the reduced footfall to our out-of-town superstores. However, we have continued to focus on our value based customer proposition and are increasing our market share in homewares, whilst also seeing good growth in our online business.  

"We are looking forward to a stronger second quarter as we continue to invest in extra seasonal space, new till systems, store refits and new store openings. We should also benefit from weaker comparatives.

"We continue to focus on our key initiatives whilst ensuring we maintain our unique offer of tremendous value for money, combined with an unrivalled range and great service."

It comes following strong end-of-year results for the retailer, with home delivery sales showing 23.2% growth.

Source: Dunelm Mill

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