Dunelm annual profit set to fall due to coronavirus closures
By Michele Maatouk
Date: Wednesday 15 Jul 2020
(Sharecast News) - Homeware retailer Dunelm warned on Wednesday that annual profit was set to fall after stores were shut during the coronavirus lockdown, as it reported a decline in fourth-quarter sales despite "significant" online growth.
The FTSE 250 company now expects FY20 pre-tax profit of between £105m and £110m, down from £125.9m in 2019. Full-year revenue, meanwhile, declined 3.9% on the year to £1,06bn.
Dunelm, which closed its stores and online operations on 24 March when the Covid-19 lockdown was imposed, said it made a loss in April and May, but returned to profitability in June.
Total sales in the fourth quarter slid 28.6%, while like-for-like store sales were down 49.7%. However, online sales surged 105.6%.
"We have been pleased with the strong customer response since re-opening," Dunelm said. "Whilst the homewares market has proven to be relatively resilient, we continue to take a cautious view of the short to medium term outlook given the ongoing uncertainty around Covid-19. We will monitor consumer trends over the summer and, where possible, provide further guidance for FY21 at our full year results in September."
The company said that in addition to demand uncertainty, FY21 will be hit by cost headwinds related to the Covid outbreak.
"Social distancing measures within the operating models of both stores and distribution have led to higher costs to operate for the short-term; in total, we estimate these costs to be around £150,000 per week."
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