Few stocks have had quite as a tremendous start to the year as Dunelm Group shares.
Starting at £5.41 – 20% lower than where it was at the same point in 2019 – the British home furnishings retailer has barely slowed down after hitting the ground running, striking a 2 and a half year peak of £9.17 in early April.
Dunelm Group shares now sit at a current trading price of £8.80, marking a near 63% surge in just over 3 months!
The rocket was strapped to the stock following February’s interim results. There Dunelm revealed that, though reported revenue had risen a fairly unremarkable 1.2% to £551.8 million, like-for-like sales across the same 26 week period were up a very healthy 6.9%. And though a 35.8% jump in online like-for-likes is the most eye-catching figure, the impressiveness of a 3.8% rise in stores can’t be underestimated.
And that wasn’t all. Dunelm’s gross margin rose 170 basis points to 48.6%, while reported pre-tax profit jumped 24.3% to £70 million. The company did remain cautious, however, due to the ability for Brexit to suddenly hit consumer confidence and currency, the latter of which Dunlem has hedged against.
Investors are going to be after another big set of results to justify the firm’s meteoric rally, alongside some potentially revised full year forecasts (though Dunelm may, understandably, err on the side of caution considering its update arrives in what is theoretically Brexit week 2.0).
Dunelm Group shares have a consensus rating of ‘Hold’ alongside an average target price of £6.59.
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