Add thelocalreport.in As A Trusted Source
Retailer Dunelm The company’s shares tumbled as profits came under pressure as sales slowed during the holiday season.
The furniture and home furnishings chain reported a modest 1.6% rise in second-quarter sales in the 13 weeks ended Dec. 27, well below first-quarter growth of 6.2%.
Shares in the company plunged 18% in early trading on Thursday after it said slowing sales would push profits below the lower end of its forecast, between 214 million pounds and 227 million pounds.
While growth over the Christmas period was comparable to last year’s figures, the company said weak trading over the festive period had weighed on profits in the first half, limiting scope for strong growth in the second half.
“This performance reflects a strong first quarter and a more challenging second half approaching,” Dunelm CEO Clo Moriarty said.
The company said it experienced particularly difficult conditions in the run-up to Black Friday and Christmas, which it said was a result of “the continued challenging macroeconomic environment.”
Ms Moriarty, who previously served as chief retail and technology officer at Sainsburys, became chief executive of the furniture store in October.
The company blamed “particularly high competitive activity in digital marketing and discounting” for the weak festive quarter results, as online retailers stepped up promotions during the key Christmas trading period.
The growth of digital products has been a focus for the homewares company, which reported that 42% of its sales during the Christmas period were online, up from 40% in the same period last year.
Ms Moriarty said: “While the UK retail environment remains uncertain, we have learned some clear lessons from the first half of the year, including taking targeted steps to improve supply.”
Despite weak results over Christmas, the company is pressing ahead with plans to open two more supermarkets after opening its second London stored in wandsworth November.