Homeware retailer Dunelm (LON:DNLM) saw shares rise nearly 7 percent on Thursday morning, after recording a moderate rise in revenue despite a “challenging” consumer backdrop.

Total revenue for the third quarter rose by 5.1 percent to £268.2 million, with like-for-like revenue up 4.6 percent. Dunelm’s online performance remained strong, with organic growth at 35.7 percent during the three month period.

“We’ve seen a good sales performance over the quarter, with like-for-like sales of 1.2% in stores and 35.7% online, despite a challenging consumer backdrop”, said Nick Wilkinson, chief executive of Dunelm.

The results come after a warning from the company in January that weakness in the legacy Worldstores business, as well as continued investment in infrastructure, would lead to higher operating costs.

Gross margin was approximately 15 basis points lower than the comparable period previously, but the firm said it gross margni figures to improve significantly in the final quarter.

Dunelm confirmed that expectations for the full year remain unchanged, and retained its guidance that H2 margins will be broadly in line with H1 margins.

Shares in Dunelm are currently trading up 6.97 percent at 560.50 (0837GMT).