(Alliance News) - Dunelm Group PLC on Thursday backed annual guidance, after a strong first half led by a festive outperformance in its second quarter.

The Leicester-based homewares retailer said sales in its first half ended December 31 rose 5% year-on-year to GBP835 million. Sales were also 43% ahead of the pre-pandemic comparator three years before.

Sales in the second quarter were especially strong, rising 18% year-on-year to GBP478 million, and outperforming three years before by 48%.

The firm noted the period was boosted as six days of its Winter sale fell into the second quarter this year, when the sale had begun in the third quarter of the previous year. This was due to the 53rd week at the end of financial 2022, the firm explained.

"This performance reflects a strong quarter in which our Autumn and Winter product ranges proved particularly popular with customers," Dunelm explained.

It saw "broad-based" growth across its categories, with its Christmas offer seeing strong sales. Its Winter Warm assortment also sold well, as customers looked to reign in high costs of indoor heating.

"We saw growth both in stores and online, with digital sales making up 35% of total sales in the quarter, 2 [percentage points] higher than the same period last year. Digital sales growth was particularly strong in the late Autumn and run-up to Christmas," Dunelm said.

Looking ahead, it left annual guidance unchanged from September. At that time, it had expected to meet company-compiled analyst consensus of pre-tax profit of GBP178 million. Given that it cites consensus as currently standing at GBP172 million, it now expects its annual results to be ahead of market expectations.

"We have delivered another strong performance and the relevance of Dunelm's value offering has really come to the fore," said Chief Executive Officer Nick Wilkinson.

Shares in Dunelm were down 2.5% to 1,047.50 pence in London on Thursday morning.

By Elizabeth Winter, Alliance News senior markets reporter

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