(Adds details on Worldstores integration, margins; background)
July 12 (Reuters) - Shares in Dunelm hit a six-year low on Thursday after it forecast full year pre-tax profit below expectations due to losses related to its purchase and integration of online furniture site Worldstores two years ago.
The company said 2018 pre-tax profit should come in at 102 million pounds ($134.73 million), below a company compiled estimate of 106.6 million pounds. Shares fell as much as 4.5 percent in early trading in response.
Dunelm, which sells curtains, beds and other home furnishings at more than 170 UK stores, said it would take an exceptional charge related to Worldstores’ integration of 8.9 million pounds in its full-year results.
The company, which warned in April that its operating costs for the year might outstrip sales growth, also estimated trading losses related to the Worldstores businesses of 8.5 million pounds.
“Whilst we benefited from the strong store opening programme earlier in the financial year, this was offset by decisions to rationalise the offer in our acquired businesses of Worldstores.co.uk and Kiddicare.com,” the company said.
The purchase of the online businesses in 2016 was part of a push by Dunelm to develop home deliveries through its website and it said its number of online customers has grown 18 percent year-on-year.
Online sales grew 42 percent offsetting a fall in like-for-like store sales of 4.6 percent.
Gross margins, which had been falling, rose 40 basis points, although the company added that reported gross margin for the quarter would have been down about 50 basis points if the company accounted for losses to clear excess inventory.
Overall revenue fell 1.4 percent in the three months ended June 30.
$1 = 0.7571 pounds Reporting by Sangameswaran S in Bengaluru; Editing by Amrutha Gayathri and Patrick Graham