StockMarketWire.com - Homewares retailer Dunelm said it expected to report lower profit this year after sales fell by 28.6% in the fourth quarter owing to store closures due to the Covid-19 pandemic.

For the year to 27 June, the company expected pre-tax profit in the range of £105m-to-£110m, down from £125.9m on-year and sales to fall 3.9% to £1,057.9m.

Gross margin was expected to be about 70 basis points higher than 2019.

Despite the weaker performance in the fourth quarter, with store like-for-like sales down 49.7%, the company reported a strong recovery in June sales, which were up 20%, compared with steep declines in April and May.

The recovery was driven by a number of factors, including a level of pent-up consumer demand and the delayed start to its summer sale, the company said.

'Since the stores have fully opened, online home delivery sales have been c. 30% and click and collect have been c. 12% of the total sales mix respectively,' the company said.

'As customers become more comfortable with the physical shopping experience under social distancing rules, we may see this digital proportion reduce, but it is difficult to predict future trends at this point in time,' it added.

Looking ahead to fiscal 2021, the company warned that the level of demand remained uncertain and flagged cost headwinds of about £150K per week directly related to the impact of the virus.

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