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Investing.com -- Dunelm shares rose more than 6% on Thursday after the retailer reported a 6.3% year-on-year increase in third-quarter revenue, marking a clear rebound from the 1.6% growth recorded in Q2.
The improvement was driven by volume growth across categories and early demand for new Spring/Summer ranges.
Gross margin in the quarter rose 30 basis points compared to last year. Full-year margin guidance remains unchanged at 51.5% to 52%.
Pre-tax profit expectations for FY25 are confirmed at £208 million, in line with consensus. Management said it was too early to determine whether the trading improvement would continue and flagged ongoing uncertainty around consumer behaviour.
The company reiterated its medium-term target of reaching a 10% share of the UK homewares market. There were no new updates on buybacks or dividends in the trading statement.
Jefferies said, “A solid trading update after a softer Q2, with a confirmation of FY PBT expectations.”
“We are encouraged by DNLM’s sales performance, including an improvement in the 2-yr stack... albeit slightly surprised by the lack of PBT upgrade today, and remain mindful of mgmt commentary regarding the ’uncertainty’ on consumer sentiment,” Jefferies added.