MARKET REPORT: Home improvement boom boosts Dunelm as shoppers flock back to its bricks-and-mortar stores
Sales boomed at Dunelm as shoppers flocked back to its bricks-and-mortar stores once Covid restrictions loosened over the spring.
Customers stocked up on cushions and bedding as the retailer brought in revenues of £380million in the 13 weeks to June 26.
This was double the same period of last year, which covered the first and strictest UK lockdown.
Soaring sales: Shoppers flocked back to Dunelm’s bricks-and-mortar stores once Covid restrictions loosened over the spring
And it was 44 per cent higher than in 2019, which many view as a better comparator. Over 12 months, Dunelm’s sales have risen by a quarter to more than £1.3billion.
As a result, the group has raised its profit guidance and told the City that it expects to make £158million – ahead of forecasts of £149million to £153million. The boom is likely to keep coming, Dunelm added, as consumers ‘improve and refresh their homes’.
Keith Bowman, analyst at Interactive Investor, said: ‘A buoyant housing market and more time at home due to the Covid crisis are likely playing into its hands.’
Despite the good news, Dunelm slid 6.3 per cent, or 90p, to 1349p. Bowman countered that a ‘more than doubling in the share price since pandemic market lows in March 2020 has already priced in much of the good news’.
But others might have clocked the warning that it is seeing some disruption and pressures in its supply chain – understood to be referring to the shortage of shipping containers worldwide that is making it trickier for firms to get products delivered.
After the market had closed, B&Q-owner Kingfisher also revealed it is still benefiting from the extra love and attention people are pouring into doing up their homes.
Britons’ new-found enthusiasm for DIY since Covid struck and the rush of house buying led Kingfisher (down 1.4 per cent, or 5.2p, to 362.3p) to hike its guidance.
It now expects first-half sales to be around 22 per cent higher – it previously said it would be in the teens – and profits to be up to £660million, a sharp increase from forecasts of up to £600million.
Housebuilder Barratt Developments also got in on the act, telling shareholders it would make more than £800million in annual profits as home sales have exploded in the rush to get deals over the line before the end of the stamp duty holiday.
Barratt rose by 2 per cent, or 14.2p, to 711p, but the wider market was gloomier.
The FTSE 100 fell 0.5 per cent, or 33.53 points, to 7091.19, while the FTSE 250 fell 0.8 per cent, or 176.77 points, to 22,750.04 as both were dragged down by travel stocks.
Oil prices rose above $76 a barrel as it emerged that Saudi Arabia and the UAE were close to resolving a dispute that put the future of a production agreement among the entire Opec+ cartel at risk.
The countries are on the brink of striking a deal that will set out how much the member states can gradually start increasing their oil output by.
Brent crude was trading at $76.18 a barrel, while Royal Dutch Shell fell 0.6 per cent, or 8.4p, to 1409p and BP slipped by 0.4 per cent, or 1.15p, to 304.75p.
Beleaguered energy group Tullow Oil bucked the trend, however, rising 1.8 per cent, or 0.94p, to 52.16p after ‘excellent’ progress in the first half.
Elsewhere, David Beckham-backed Guild Esports tumbled 8.8 per cent, or 0.71p, to 7.35p after boss Carleton Curtis made the ‘personal decision’ to step down.
As executive chairman, Carleton had navigated it through its stock market listing last October.
The esports company is setting up its own teams to compete in online video game tournaments, where they play the likes of Fifa and Fortnite. Board director Derek Lew steps in as non-executive chairman.
Over on AIM, non-bank lender Lendinvest had a stellar first day of trading, ending at 197.5p after going public at 186p per share.