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Investing.com - Dunelm Group (LON:DNLM) reported a solid first-half performance despite a challenging retail environment earlier Tuesday, but also announced the departure of long-time chief executive Nick Wilkinson.
At 04:35 ET (09:35 GMT), Dunelm stock rose 0.1% to £9.71, but remains down almost 10% year-to-date.
Dunelm, the UK’s leading homewares retailer, announced a 2.4% increase in sales, with a notable 39% of total sales coming from digital channels. Gross margins improved slightly, and profit before tax remained stable.
In terms of recent trading, Dunelm has stated that it is encouraged by early trading in the second half of its fiscal year, but it remains mindful of a challenging sector backdrop and a cautious consumer, and keeps its FY25 pretax profit expectations for the year unchanged.
“Dunelm has also announced an interim DPS of 16.5p vs consensus of 15.5p and a special dividend of 35p per share, which is higher than both our and consensus expectations,” said analysts at RBC Capital Markets, in a note.
“Market share increased to 7.8%, up 30bps on a calendar year basis and Dunelm has highlighted active customer growth of 4.3% in 2024.”
The company also announced that its chief executive Nick Wilkinson will step down after seven years after leading the company through a strategic change, digitalisation, and the pandemic.
RBC has maintained an ‘outperform’ rating on the company, with a 12-month price target of £11.75.
“Dunelm has a strong market position as a specialist player in the UK homewares space, with a strong range advantage and a good price-value positioning,” RBC said. “We believe that Dunelm is continuing to gain market share, helped by its value proposition and wide range assortment.”
“We think that Dunelm remains a cash generative business, with a strong balance sheet, and so we see potential for additional cash returns to continue in the near term.”