Dunelm reported a jump in sales for the 13 weeks to June of 9.3% compared to the previous year but says that profits were dented by the purchase of competitor Worldstores.
The figures from Dunelm are not only impressive but smashed market expectations after the homewares retailer only last month warned that the post Brexit tougher trading environment in the UK meant that profits could be lower.
Looking at UK retail sales figures the UK consumer is proving to be resilient when faced with the current squeeze on their pay packet, as prices rise and wage growth stagnates.
UK businesses are concerned about the future and that uncertainty is showing through in these “tougher trading environment” warnings, which are now almost standard now in the retail sector.
However, in many cases, like that of Dunelm, these concerns seem to be overplayed.
The stock jumped 5.8% to 742p in early trading following the results, as investors are gaining confidence in Dunelm’s recovery story.
This recovery story has seen Dunelm’s share price jump 33% in the last three months.
Not bad considering the “tough trading environment” and that this was achieved without a chief executive.
Fiona Cincotta – a senior market analyst at www.cityindex.co.uk