UK and Global Earnings Round-Up: Dunelm, Lloyds, Volvo, Renault Impress – But Caution Remains

Key Q3 earnings results reveal mixed performance across retail, banking, and automotive sectors

As earnings season heats up, several high-profile names across the UK and Europe have released their third-quarter figures. Here's a concise summary of the key takeaways, highlighting major movements in profit, revenue, and investor sentiment.

Dunelm Sees Sales Growth but Warns of Second-Half Weighted Profits

Dunelm Group (LON: DNLM), the UK’s leading homewares retailer, reported:

• A 6.2% year-on-year rise in Q1 sales to £428 million
• A digital sales increase to 40% of total sales, up 3 percentage points
• A gross margin improvement of 80 basis points, helped by efficient operations and favourable FX conditions

Despite positive numbers, Dunelm’s shares slipped by 1.5% after management flagged that profits would be skewed to the second half of the year. Strong sales in warming homeware items like throws and rugs were supported by a 40% YoY growth in the student campaign.

The launch of a mobile app and the "Home of Colour" branding campaign helped drive digital growth. CEO Clo Moriarty reaffirmed the retailer's commitment to sustainable long-term expansion with a target to gain a 10% market share.

Volvo Beats Earnings Forecast Despite Revenue Dip

Volvo Cars reported stronger-than-expected Q3 earnings:

• Revenue: SEK86.4 billion, 4% above consensus
• EBIT margin: 7.4%, boosted by a one-off provision reversal
• Free cash flow: SEK -4.3 billion, better than expectations

However, revenue fell by 7% year-on-year, mainly due to:

• A 5.2% drop in wholesale volumes
• Adverse foreign exchange impacts of 4.8%

Shares in Volvo Cars remained flat despite the earnings beat, reflecting investor caution around currency and volume headwinds.

Lloyds Hit by Motor-Finance Scandal, Cuts Guidance

Lloyds Banking Group took a hit to earnings as it set aside more funds to compensate customers affected by the motor-finance mis-selling scandal:

• Q3 pretax profit fell 36% to £1.17 billion, from £1.8 billion YoY
• £800 million added to the provision, bringing the total to £2 billion
• Return on tangible equity dropped to 7.5% from 15.2% last year

Lloyds also revised its full-year guidance downward, with ROTE now expected at around 12%, below its earlier estimate of 13.5%.

Still, the bank posted a 7% rise in net interest income, supported by lending growth. CEO Charlie Nunn praised the bank’s cost discipline despite the hit.

Renault Rides High on New Models and Sales Surge

French automaker Renault outperformed expectations in Q3:

• Group revenue up 6.8% to €11.43 billion
• Vehicle deliveries surged 9.8% to 529,486 units
• New model launches accounted for 30% of Q3 sales, up from 25% at the end of 2024

While maintaining its revised 6.5% operating margin forecast, Renault continues to feel pressure from low-cost Chinese EV rivals and increased U.S. tariffs on imports. CFO Duncan Minto emphasised the strength of Renault’s mixed line-up across ICE, electric, and hybrid cars.

Analyst Philippe Houchois from Jefferies described the results as "marginally ahead of expectations," citing favourable volume and country mix.

Outlook: What to Watch Moving Forward

• Retail sector: Consumer demand remains resilient but inflationary pressures and cautious spending may weigh on H2 profitability
• Automotive: New model innovation and pricing strategies are key as EV competition rises
• Banking: Provisioning for past scandals is dampening otherwise robust interest income gains

Stay tuned as more earnings roll in this week and into the next. Expect investor sentiment to remain sensitive to forward guidance, consumer trends, and macroeconomic signals like inflation, interest rates, and geopolitical risk.

Sources: (Investing.com, MSN.com)