Dunelm sees profit in-line with estimates on strong demand; inflation woes loom

(Reuters) -Britain's Dunelm Group forecast its annual profit to be in-line with market expectations on Thursday, encouraged by resilient consumer demand for home furnishing and the company's efforts to keep a tight lid on operational costs.

Analysts on average expect profit before tax for the full year to come in at 202 million pounds, according to a company-supplied poll.

Dunelm, which sells items from bedding, sofas, chairs to garden furniture, reported a 1% increase in second-quarter sales to 483 million pounds ($613.22 million), driven by higher sales during the festive season as customers rushed to grab holiday offers.

"We were particularly pleased with sales in our cook and dine category, which benefitted from improved ranges as we have developed our product mastery, and strong sell through of our Christmas products," Chief Executive Officer Nick Wilkinson said in a statement.

"Our new Spring collections look fantastic in store and are being really well received by customers as we reach the end of our Winter Sale, leaving us well placed to make further progress in the months ahead."

However, this quarterly growth was much lower than the 14% jump the company reported in the same period last year, highlighting the lacklustre spending patterns among consumers due to still-high inflation.

"Consumers remain under pressure and are actively seeking true value at all price points," Wilkinson added.

($1 = 0.7876 pounds)

(Reporting by Eva Mathews and Radhika Anilkumar in Bengaluru; Editing by Rashmi Aich)