(Reuters) - Homewares retailer Dunelm raised its annual profit guidance for the second time in two months as the early wet summer weather drove Britons to its out-of-town shops and online spending continued apace.
Like many of its peers, Dunelm has been expanding its online business as price-conscious consumers look for bargains online. But recent rainy weather has also tempted shoppers to visit its stores to give their homes a makeover.
The company, which sells home furnishing products including kitchenware, dining, lighting, art and rugs out of more than 170 stores, said it now expects to report pretax profit in the range of 124 million pounds to 126 million pounds for the year ending June 29.
In April it expected profit to be around 120 million pounds, at the upper end of the range of analysts’ forecasts.
Dunelm’s shares rose 7.6% to 972.5 pence at 0935 GMT and were among the top gainers on London’s midcap index.
The Leicester-based retailer, which launched its “fully shoppable” website 14 years ago, has struggled through a costly integration of online platform Worldstores since 2016.
“It (Dunelm) says the weather has been a help, although initially you may think bad rain would prevent people from wanting to hit the shops. However, there is some logic to Dunelm benefiting from the recent unseasonable weather,” AJ Bell investment director Russ Mould, said.
“Lower average temperatures will have seen more people stay indoors, in doing so they may have paid more attention to the interior of their home and thought about making small changes,” he added.
More generally the cold weather in May prompted the biggest drop in British retail sales this year as shoppers delayed buying summer stock, especially clothes, according to data here
Dunelm, which reported an underlying pretax profit of 102 million pounds in 2018, sells about 30,000 product lines in store and about 60,000 online. It said total like-for-like sales had grown particularly in May and June.
“The company almost had good trading momentum all year anyway. But the real catalyst for this cause has been the weather ... Footfall has been far stronger than expected.” Peel Hunt analyst John Stevenson told Reuters.
Dunelm was founded in 1979 as a market stall business, selling ready-made curtains, with the first shop opened in Leicester in 1984.
Reporting by Samantha Machado and Noor Zainab Hussain in Bengaluru; editing by Gopakumar Warrier and Elaine Hardcastle