Dunelm leaps after profits fillip eases fears over retail in the City

Dunelm was cheered by the City on Monday after it said profits for the year would be better than expected, allaying fears of a retail Armageddon.

The company, which sells anything from bedding to blinds and furniture, said revenue was up 9% to £282 million for the second quarter to December 29, thanks to a 37.9% rise in online sales. Same-store sales were also up 5.7% year-on-year.

The shares jumped 11%, or 65p, to 643.7p, as it said profits would be “modestly” ahead of expectations, reinforcing the growing view that Christmas was not as bad for retailers as was first feared.

Dunelm, due to update the market next week, added it expects full-year profits to be at the top range of analysts’ forecasts.

But chief Nick Wilkinson said: “Despite our strong performance, we remain cautious on the outlook for the second half given the ongoing uncertainty in the UK economy.”

Similarly, arts and crafts retailer Hobbycraft had a bumper Christmas. The company, owned by private equity firm Bridgepoint, said same-store sales rose 7.1% over the six weeks to December 24.