Dunelm and Currys Face Inflation Headwinds Ahead of Results
Dunelm Group (LSE:DNLM) is set to report its full-year results on September 8, following an update in July that showed fourth-quarter sales rose by 2.9% to £428 million, leading to a full-year growth of 3.1% to £1.83 billion. The profit number is expected to be around £210 million, which would be in line with estimates and the previous year.
The company's strategy update is likely to focus on its digital presence, where 45% of sales were conducted online in the final quarter, up by 3% from the corresponding period last year. This marks a significant shift towards e-commerce, with Dunelm introducing an AI-powered shopping assistant on its app.
Despite its reputation as a value offering, Dunelm has fallen by 24% in the year to date due to inflationary and cost of living concerns, which have affected the sector as a whole. However, the shares are up by 35% over the last four years, and the company offers a generous dividend yield of 5.3%, with an additional special payment bringing it to 8.2%. Dunelm has also expanded its presence overseas through the acquisition of Home Focus in Ireland.
Currys (LSE:CURY) is expected to report its trading statement on September 10, following a strong performance over the peak festive trading period that led to an upgrade in profit guidance. The company's shares have risen by 40% over the last year and by 90% over the last two years.
Currys' omnichannel offering has been a key factor in its success, with customers preferring to shop in-store for expert advice. The group has also made significant strides in its Nordics business, which accounts for 40% of overall revenues. Currys has announced an additional share buyback and boosted its dividend.
Berkeley Group Holdings (LSE:BKG) is scheduled to report its trading statement on September 11, after its full-year results revealed a deterioration in the UK economic backdrop. The company's shares have fallen by 12% this year and by 42% since pre-pandemic highs in January 2020.
Berkeley Group has expressed frustration with the current situation, citing planning and regulatory issues as major obstacles to growth. However, the company remains optimistic about its long-term prospects, particularly in London's undersupplied housing market. Berkeley has a robust balance sheet and is committed to shareholder returns, currently skewed towards share buybacks.
The European Central Bank will deliver its interest rate decision on September 10, with investors expecting a 25-basis point hike to 2.5%. The decision is seen as a done deal, given the Eurozone's annual inflation rate accelerating to 3.3% in August, exceeding the ECB's 2% target.