Dunelm says first-quarter comparable sales rise 9 pct

* Q1 comparable sales up 8.9 pct

* Total sales up 17 pct to 180.6 mln stg

* Shares (Berlin: DI6.BE - news) rise as much as 5.4 pct (Adds details, analyst comment, updates shares)

Oct 3 (Reuters) - British homewares retailer Dunelm Group (LSE: DNLM.L - news) Plc reported an 8.9 percent rise in like-for-like sales in its first quarter, saying the improvement reflected higher demand for its products as well as weak comparatives from last year.

Shares in the company rose as much as 5.4 percent on Friday morning and were up 41 pence at 834.25p by 0752 GMT.

The company, which sells bedding, curtains, furniture and home utility items, said total sales rose 17 percent to 180.6 million pounds ($291 million) in the 13 weeks ended Sept. 27.

A year ago the retailer had reported a 5 percent fall in first-quarter comparable sales, as fewer people visited its stores during one of Britain's hottest summers.

Dunelm opened one superstore in the first quarter, taking the total to 137 and moving towards its medium-term target of 200.

More direct sourcing from factories also enabled the company to expand its gross margin by about 40 basis points from a year earlier.

Analyst Freddie George at brokerage Cantor Fitzgerald said Dunelm "should benefit from a recovery in both the housing market and consumer confidence and still has a great opportunity to improve gross margins by growing own label and the amount of directly sourced product."

The brokerage has a "buy" rating on the stock with a target price of 900 pence.

Dunelm - founded by Chief Executive Will Adderley's billionaire father in 1979 - has stepped up its focus on enhancing its product range and in-store presentation of furniture.

It has also increased its investment in digital marketing, brand awareness and store refurbishment.

(1 US dollar = 0.6198 British pound) (Reporting by Aastha Agnihotri in Bangalore; Editing by Sunil Nair and David Holmes)