Dunelm Group (LSE:DNLM), the UK's leading homewares retailer, said fourth-quarter sales rose 2.9% to £428m for the 13 weeks to 27 June, taking full-year sales to £1,825m, up 3.1% on the prior year.
Full-year pre-tax profit is expected to be in line with previous guidance and the company-compiled consensus average of £210m.
Gross margin ended the year at 52.5%, up 10 basis points year-on-year, helped by an FX tailwind though partly offset by increased customer participation in promotional events, particularly in the second half.
Net operating costs benefited from the timing of marketing spend and lower business rates, alongside roughly £7m of insurance income tied to compensation for two stores temporarily closed following fires.
Digital participation rose 2 percentage points to 42% for the year, and 3 points to 45% in the fourth quarter.
Cash generation remained strong, with roughly 70% of operating profit converted to free cash flow, and a small net cash inflow for the year after £141m in dividend payments.
Dunelm opened a new 34,000 sq ft superstore in Kingston-upon-Thames in the final week of the year and relaunched its St Albans store, with new openings in the coming financial year expected toward the upper end of its guidance of five to ten superstores annually.
"As the market leader in a large and highly fragmented market, we believe our best growth opportunities are still in front of us", said chief executive Clo Moriarty.
The company will provide a further strategic update alongside its full-year results on 8 September.
