Dunelm shares flash red as sales disappoint and the homewares chain flags ‘softness’ of its market amid Brexit deadlock
- Dunelm shares slid by nearly 6% in early trading on Thursday to 767.42
- The company said its like-for-like sales jumped by 6.4% in the past quarter
- By mid afternoon, the stock was down by 14% to £7.00
Dunelm shares slid by more than 11 per cent on Thursday as the retailer flagged ‘mixed’ trading during September when ‘political uncertainty’ took its toll on the homewares market.
In a trading update, the firm said sales grew by more than 6 per cent in the past three months. However, that fell short of analyst expectations of a near 11 per cent jump.
Investors were also put out by Dunelm’s admission that its performance in September was mixed as the UK’s £13billion homewares market was knocked by the ongoing Brexit uncertainty and weak consumer confidence.
Dunelm shares closed down 10% at £7.30 following its trading update
But the company shrugged it off. ‘We are pleased with our performance in the first quarter, building on the strong growth delivered over the last year,’ said Dunelm boss Nick Wilkinson.
‘Despite the recent softness in the homewares market and the increased political uncertainty, we are confident we can continue to win market share and our expectations for the full year remain unchanged,’ he thundered.
Its comes after furniture firms DFS and ScS reported a slowdown in recent sales as shoppers hold off from making big purchases as the Brexit deadline approaches.
Dunelm was founded in 1979 as a market stall business selling ready-made curtains. Its first shop opened in Leicester in 1984.
Now with 170 shops, Dunelm is in the process of launching a new website as it looks to drive the fast-growing digital side of the business.
Dunelm was founded in 1979 as a market stall business selling ready-made curtains
Commenting on the drop in shares, Steve Miley from Ask Traders says: ‘Expectations for sales were in the region of 11 per cent, so the increase reported is a little disappointing.
‘After a strong end to the previous year, expectations were riding high. Brexit uncertainty, consumers reining in spending and shopping habits changing are challenges which appear to be starting to catch up with the homeware retailer.’
Dunelm has seemingly defied the gloom in the retail sector over the past year with a string of positive results. In its previous quarter, sales grew by more than 10 per cent.
Russ Mould from AJ Bell said today’s sales numbers ‘would still be the envy of many retailers, but arguably not enough to sustain the excitement behind the Dunelm story’.
Dunelm shares closed down 10.4 per cent at £7.30.