omewares firm Dunelm has revealed falling annual profits as it battled rising costs, but forecast a return to earnings growth in the year ahead.
The retail chain reported a 9.4% drop in pre-tax profits to £192.7 million for the year to July 1, down 7.8% on a pro-forma 52-week basis despite total sales lifting 5.5% on a 52-week basis to a record £1.6 billion.
The group said the profits fall reflected “tight control of margin amidst inflation in our operating costs and our ongoing commitment to investment for the future”.
Consumer behaviour remains “unpredictable”, according to the firm, but it said it was pleased with trading so far in the new year and forecast growth in sales and pre-tax profits over 2023-24.
In a period of extensive economic uncertainty, we have maintained our focus on enhancing our customer proposition, expanding our offer whilst staying fully committed to value and making every pound count
Dunelm said: “Consumers are still responding to their own cost-of-living pressures and there remains uncertainty as to what this means for discretionary spend.
“Against this backdrop we remain focused on our proposition and ensuring our customer offer is as relevant as ever.”
It said growth over the year ahead would be driven by higher sales by volume, while costs have also started easing, particularly for shipping.
Dunelm said it had cut prices for shoppers as its own costs fell, with its “value proposition resonating well” with cash-strapped consumers.
Nick Wilkinson, chief executive of Dunelm, said: “In a period of extensive economic uncertainty, we have maintained our focus on enhancing our customer proposition, expanding our offer whilst staying fully committed to value and making every pound count.”
He said the group would continue to invest “where we see good returns, so that we can seize the various opportunities ahead”.
“As we manage the ongoing challenges, it is crucial that we do not lose sight of our longer-term ambitions,” he added.
Half-year results from the retailer showed sales lifted 6.1% in the final quarter, matching growth in the previous three months.