Dunelm profits down amid challenging retail climate

The firm - which last month saw its chief executive, John Browett, step down with immediate effect for “personal reasons” - reported a 28.3% fall in pre-tax profit to £92.4 million in the year to July 1.

Like-for-like sales dipped 0.5% in the period, with comparable store sales falling 2.4%.

Overall revenue rose 8.5% to £955.6m.

Dunelm pointed to a “challenging and subdued market environment” and also pinned the profit fall on losses at recently acquired Worldstores and increased investment.

Chairman Andy Harrison said: “Dunelm has made good strategic progress over the year, most notably with the acquisition of Worldstores, which moves us closer to our goal of being the biggest and best multichannel homewares retailer in the UK.

“We expect the trading climate to remain challenging with the disposable income of UK consumers under pressure.”

The news comes after Dunelm warned in February that costs were starting to rise in the face of the Brexit-induced collapse in the value of the pound, resulting in a more “challenging” retail environment.

But Mr Harrison chose to focus on the future, adding that the group is still aiming to double sales to £2 billion, driven by its online offering.

Dunelm said that sales in the first two months of the new financial year have started “positively”, with good like-for-like sales boosted by favourable weather.