13 weeks to 1st October 2022 Q1 total sales are -8% YoY, in line with the first 10 weeks of trading when sales growth was described as “down”, and having been +1.7% YoY in Q4 last year. Prior year comparatives were tough given the postponement of the June Summer Sale last year into July. Versus pre-pandemic levels, sales are +36% 3YoY (Q4 FY22: 36% 3YoY). Interestingly Digital participation remains unchanged YoY at 33% - albeit +14%ppts 3YoY. Elsewhere gross margins are down 130bps YoY, in line with management’s comments at the recent Finals - for gross margins to “normalise back to 50%” (LY: 51.2%). Outlook FY23 guidance remains unchanged despite the challenging macroeconomic environment. Management also comments that whilst exchange rate movements have been particularly volatile in recent weeks, Dunelm is well hedged for the remainder of FY23. View As a reminder, full year consensus estimates assume that total sales growth will be broadly flat this year. Following today’s print, total sales growth for the remainder of the year will need to be c. +3% YoY for full year consensus sales to be met while the comparative over Q2 and Q3 get tougher going forward on a 1 year basis. Expectations are therefore starting to look stretching. While Dunelm’s healthy market share performance indicates an intact proposition, cyclical pressures are mounting. However, the valuation on 11.1x FY23E PE looks undemanding versus historic levels.