Dunelm has posted a 3.8% jump in total sales to £1.77bn in its full year results.

The homewares retailer, announcing its preliminary results for the 52 weeks to 28 June, also reported a 2.7% rise in pre-tax profit to £211m, after stating it had “absorbed” inflationary headwinds.

Dunelm reported a “strong” gross margin of 52.4%, an improvement from 51.8% last year, which it said had demonstrated its “commercial and operational grip”. As a result, the company has announced a final ordinary dividend per share of 28p, up from 27.5p last year, bringing its total ordinary dividend per share to 44.5p, up from 43.5p last year.

Dunelm’s CEO, Nick Wilkinson, said Dunelm had a “successful year”, as he also confirmed these would be his final set of results in the role.

“I’m pleased to report another successful year, marked by growth in sales and profits, increased market share and meaningful strategic progress,” Wilkinson commented.

“We’ve learned to navigate a volatile consumer environment, raising the bar on what really matters to our customers – delivering amazing value and helping them to create stylish, joyful and hard-working homes. With a thriving digital offer, vibrant stores, and a broadening category offer, we're finding new and meaningful ways to be relevant in our customers’ lives.”

Dunelm also revealed in the trading update that the company was “pleased” with early trading into the new financial year, although added it had yet to see signs of a sustained consumer recovery.

Despite this, the FTSE 250 listed company’s share price fell by more than 10% in today’s trading.

Investment director at AJ Bell, Russ Mould, added: “Dunelm is holding its head above water in a tricky retail environment, yet investors clearly want more judging by the negative market response to its latest results.

“Sales and profits have moved higher, and the company is cautiously optimistic about its future. However, profit margins have shrunk slightly, net debt has nearly doubled, and the company says it hasn’t seen any signs of a sustained consumer recovery.

“Dunelm needs to keep the ship steady in this tricky environment and it’s doing a fair job. Chief executive Nick Wilkinson can be proud of the business he’s helped to grow as he bows out with this set of results.”

---