Dunelm shares are up 5% as a result of this morning's trading update.
Companies: Dunelm Group plc
Dunelm (LON: DNLM) has released a trading update for the first quarter of FY18, outlining the Group's progress for the financial year so far, and the progress of its recently acquired Worldstores business.
Shares were up 5% to 737p as Management said LFL sales were up 9.3% compared to Q1 17, bolstered by a 46% rise in online sales at dunelm.com.
The Group acquired rival etailer Worldstores in November 2016 for £8.5m, with then Group CEO John Browett saying he'd bagged his very own "Black Friday deal".
Like-for-like sales were boosted by "favourable weather comparatives" in the period, and the Group is experiencing "strong" growth online.
FIve new stores were also opened in Q1 18, bringing the Group's total site number to 165.
The Group will hold a Capital Markets Event today for institutional investors and analysts to outlines the Group's sales aspirations and business goals
N+1 Singer put out a research note on the Group today, optimistic about the Group looking forward:
"Today’s [Capital Market Day] should underline the potential for more positive surprises particularly as consensus assumptions for revenue growth and cost ratios both look far too downbeat. Rather than the 10% expected, DNLM could comfortably deliver a 15-20% 3yr EPS CAGR. Alongside a very undemanding rating, the buy case remains intact."
DNLM currently has a market cap of c. £1.4bn and trades at a PE ratio on par with the industry median of 14x. Share prices have suffered in 2017, falling from a high of 808p in January but have clambered their way back in the past few months from a low of 545p in July.
Revenue growth for the Group has risen steadily c. 10% YoY while Net margin growth has remained flat.
