The first quarter has delivered impressive results for Dunelm Group plc, with sales reaching £403 million - an increase of 3.5% year-on-year (YoY). This strong performance highlights the effectiveness of the company’s strategies and its dedication to customer satisfaction, setting the stage for continued success in the home furnishings market.This is not the end of the good news included in the latest trading update covering the 13-week period that ended on 28th September 2024. The UK's leading homewares retailer reported a 20 bps increase in gross margin (YoY), while maintaining stable pricing. With this in mind, the group is confident it will achieve a gross margin of 51% and 52% for FY25.Digital sales are going strong, accounting for 37% of sales in Q1*. This represents a YoY growth of +2ppts. This success can be attributed to ongoing improvements in the digital shopping experience. A new AI-led product discovery feature has been implemented in partnership with Google, enhancing the search functionality. Additionally, significant improvements have been made to the Click & Collect service. Over half of the SKUs on dunelm.com are now available for in-store pick-up, supported by a more efficient customer collection process.The physical presence of Dunelm remains robust and a first inner London store in Westfield London is due to open in H1. This, along with another 5 to 10 new superstores in the pipeline for the year, will support the business in connecting with customers at both smaller and larger locations.Recently, the company has had several successes to celebrate in its efforts to enhance product offerings and connect with more customers. The sofa collections have performed exceptionally well, resonating with customers through their curated and vibrant designs. Furthermore, the company rolled out its largest student campaign to date, showcasing a stylish assortment and appealing discounts, successfully attracting younger consumers.All of these factors contribute to the group's long-term priorities and position the company well to continue achieving its goals. Nick Wilkinson, Chief Executive Officer, commented:"Whilst we are yet to see meaningful change in underlying consumer sentiment in our markets, we remain focused on our plans. We believe we have continued to gain market share and, with continued strategic progress, remain confident in our ability to reach our next market share milestone of 10% in the medium term."
*Including home delivery, Click & Collect and tablet-based sales in store.
