Dunelm’s profits dip as end of home improvement boom and high inflation eats into margins
Homewares retailer Dunelm today said its profits have dipped since the pandemic due to soaring inflation and the end of the Covid house improvement boom.
The Leicestershire firm said higher prices and slower sales had caused its pre-tax profits to drop by 16.6 per cent to £117.4m.
Dunelm’s results come as the amount of profit the homeware seller reaped on each sale fell from 52.8 per cent in the final six months of 2021 to 51.1 per cent in the last half of 2022.
The lower profit margin saw Dunelm’s profits drop, even as the firm expanded its overall sales by five per cent, to £835m.
The firm however said it had expected the dip in pre-tax profits as Dunelm upped its interim dividend from 14p to 15p.
The higher overall sales came as Dunelm grew its customer base by 5.7 per cent as it marginally expanded its online presence in making just more than a third (34 per cent) of its sales through its website.
Edison Group director Russell Pointon said: “Dunelm has demonstrated remarkable resilience despite the headwinds of rising living costs.”
Pointon however warned the higher input costs “continue to pose a challenge” as he noted Dunelm is “not impervious to the tough retail landscape” faced by UK businesses.
He noted that Dunelm’s online sales have begun to “plateau” as he suggested the firm must now increasingly shift focus towards “budget-conscious shoppers”.