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Dunelm shares crash after shock profit warning

Dunelm Lowestoft

The share price of Dunelm crashed yesterday, wiping almost £139m off the value of the company after bosses issued an unexpected profit warning.

The soft-furnishings retailer which originated as a market stall in 1979, warned that full-year profit would fall below the £109.3 million made in 2017 after ‘unexpectedly challenging’ conditions during Q4.

A dramatic decline in footfall during the period February to April, resulted in a 4.7% decline in like for like store sales. Despite the decline in store footfall, online sales increased a very positive 43.7% during the same period, leading to total like-for-like sales growth of 0.1 per cent in the quarter to date.

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“Following a good performance in the first three quarters of the financial year, the group has recently experienced trading conditions which have been materially more challenging than had been expected, within a soft homewares market. These conditions have impacted our trading performance.”Dunelm said.

The retailer still expects total full-year sales to be around the £1 billion level, an increase of approximately 10% over 2017.

Dunelm chief executive Nick Wilkinson said: “We have seen an unexpectedly challenging start to the fourth quarter, with continuing softness in the homewares market and reduced footfall to our stores. We are making good progress on our strategic plans to be a truly multi-channel retailer and further strengthen our customer offer. We will learn from recent trading and I remain optimistic about our ability to deliver strong sales and profit growth in the future.”

Source: Insight Team

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25 May 2018

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