omewares giant Dunelm has seen yearly profits climb nearly a third higher to a new record, but the company has warned that the larger economic context is “very tough.”
The company announced that its pre-tax profits increased by 32.4% to £209 million on a pro forma 52-week basis, which is an increase from £157.8 million in the prior year.
In the first ten weeks after the company’s fiscal year ended on July 2, Dunelm reported that sales had continued to be “robust,” despite the fact that they were lower than the same period a year earlier, when trading was boosted by a delayed summer sale and the reopening of stores as Covid-19 restrictions were lifted. But its costs have been skyrocketing, with inflationary pressures adding additional £17 million to its annual operating expenses, and the company has stated that it will “continue to aggressively work on making every pound count.”
In spite of the more pessimistic view for consumer spending and the difficulties with costs, it maintained its expectations for the forthcoming fiscal year.
“We feel confident and well positioned to weather the current economic headwinds,” said Chief Executive Nick Wilkinson. “We emerged from an unprecedented worldwide pandemic as a bigger, better firm, and we believe we have the skills in place to achieve that again.”
Having said that, the operating environment and the economic situation are both highly difficult.
We have to ensure that every pound is put to good use, not only for ourselves but also for our clients.
“In this environment, we need to make every pound count, both for ourselves by maintaining a firm operational grip and maintaining cost discipline, and for our consumers by providing excellent value at all different price points.”
The company’s overall sales increased by 16.2%, with online sales accounting for 35% of turnover, which is an increase over the previous year’s figure of 20%.
It reported that it had increased wages for its 11,000 employees by more than 7 percent on average in order to assist with the rising expense of living.
During the course of the year, the organization added the equivalent of about 800 new staff members.
The announcement that Alison Brittain, the former leader of Whitbread, will take over as chairwoman of Dunelm came shortly after these numbers were released.
Ms. Brittain was appointed to the board of directors of the company on September 7 in the capacity of independent non-executive director and chair-designate, with the intention of succeeding Andy Harrison as chairman of the board before the end of his nine-year term in September of the following year.