Dunelm returns to LFL sales growth in second quarter

7th Jan 2014 07:22

- LFL sales grow 2.9 per cent in Q2- H1 profits to rise slightly- Store expansion plans reiteratedUK homeware retailer Dunelm was able to return to like-for-like (LFL) sales growth in the second quarter after a tough start to the year.The company said it expects to report a pre-tax profit for the first half of around £61.5m, up slightly from the £59.8m recorded the year before.Dunelm registered sales of £356.3m for the six months to December 28th 2013, up 4.8% year-on-year, helped by its portfolio development programme which included six new store openings - one of which was a relocation.This brought the number of its stores to 131. The retailer said it expects to open 10 new stores this year (three of which are relocations), and reiterated its medium-term target to have about 200 stores in the UK.On a LFL basis, first-half sales declined by just 0.9% as a strong rebound to 2.9% growth in the second quarter partly offset the substantial 5.3% decline in the first three months of the year when trading was adversely affected by some unusually warm weather.Dunelm said that second-quarter LFL growth was aided by its second autumn catalogue and its first-ever TV advertising campaign.Meanwhile, gross margins for the period are expected to have risen by 100 basis points year-on-year "as our direct sourcing programme continued to bring benefits and as we annualised the impact of clearing slow-moving promotional lines."Dunelm traded robustly during this key period with our trusted 'every day low price' positioning retaining a strong appeal for customers," said Chief Executive Nick Wharton."With a strengthening customer proposition, increasing brand awareness, a significant new store growth opportunity and an exciting multi-channel agenda in place, the board remains confident in the long-term growth prospects for the business," he said.BC