Home furnishings retailer Dunelm Group (GB:DNLM) posted its annual results for the fiscal year 2022, with revenues growing by 16% to £1.5 billion and profits jumping by 32.4% to £209 million.
The company’s numbers were boosted by higher online sales which continued even after lockdown.
The company managed to keep up with high demand on digital channels which contributed 35% to its total sales. It also benefited from the high demand for home decoration, which increased its market share in homeware and furniture.
The company is feeling the high inflationary pressures in the economy. Dunelm still managed to keep its gross margin at 51% by keeping tight control over its costs. Operating costs, however, increased by 11.3%, mainly due to increased wages for staff struggling with inflation.
Following the announcement of the results, the stock increased by about 4% – although it has been trading down by 43% this year.
Dunelm Group is a UK-based retailer that offers a variety of products in the home furnishings category through digital as well as in-store shopping.
Dunelm Group’s share price forecast
According to TipRanks’ analyst rating consensus, Dunelm stock has a Moderate Buy rating. The stock has two Buy and four Hold recommendations.
The DNLM target price is 1,006.6p, which is 33.7% higher than the current price level. The stock has a high forecast of 1,160p and a low forecast of 850p.
Conclusion
Despite the challenging environment, the company said it is on track to deliver another profitable year in line with expectations.
The company also stated that it is off to a great start this year with higher sales and a good response to its summer sale.
Russ Mould, investment director at AJ Bell, said, “As the retailer desperately tries to make ‘every pound count’, to use the language of chief executive, Nick Wilkinson, doing what it can to keep a lid on costs and offer customers value, there may be some confidence that it can emerge from the storm a stronger business.”
