Dunelm Group has announced its interim results for the 26 weeks to 27th December 2025. It enjoyed "solid" H1 trading, despite a challenging environment, seeing sales growth of 3.6%, with total sales increasing to £926m - and growing ahead of the combined homewares and furniture market, with market share up 20bps to 7.9%. Digital participation was up 2ppts to 41%.
Dunelm reports a strong gross margin of 53.4% (from 52.8% in H1 FY25), up 60bps, "largely driven by FX gains with retail prices held broadly stable". PBT was £114m (from £123m in the previous comparative half), down YoY. "reflecting the softer trading in Q2 and the timing of certain costs". Free cash flow stood at £171m.
Following that softer Q2, Dunelm says it has seen stronger sales growth in Q3 to date, "more in line with H1 as a whole".
The retailer remains confident in its plans for the second half, with the full launch of its app planned for spring, and furniture availability recovery plans in place. It says it sees clear opportunities to build on its strengths with a "relentless customer focus, product excellence and retail rigour".
Dunelm expects PBT for FY26 to be in line with current market expectations (£210m-£221m).
CEO Clo Moriarty (pictured) says: “Since joining Dunelm in October, I’ve been struck by the magic that has turned this very special business from a market stall into a market leader. Dunelm is a universal brand with something for everyone, powered by a compelling combination of physical stores, a growing digital platform, and passionate colleagues who care deeply about delivering for customers.
"We delivered a solid first half performance despite a softer second quarter, and we are seeing stronger sales growth in early Q3 following a good winter sale and an encouraging response to our new spring ranges.
"What I’ve seen so far gives me real confidence in our future. With only 7.9% market share and clear opportunities to enhance and expand our assets, we have significant headroom for growth. We will build on our existing strengths with relentless customer focus, product excellence and retail rigour, underpinned by the financial discipline for which Dunelm is known. There is much more in the tank, and I’m excited for what lies ahead.”
Commenting on these results, Julie Palmer, managing partner at BTG, says: “Dunelm seems to have been able to hold its own through a difficult winter trading period, delivering growth in sales at a time where spending and confidence continues to be low. It will be banking on momentum from its winter sale in Q3 to carry strong sales into spring as the latest rise in retail sales last month indicates shoppers have been holding off for bargains. Despite lower profits reflecting softer trading in the homewares and furniture market, growing market share, gross margins and digital sales will have left the retailer sitting fairly comfortably entering its second half.
“When shoppers feel like they have less money in their pockets, it is often discretionary spending on things like homewares and furniture that show the first signs of drying up. Dunelm will need to bank on continuing to take share in a shrinking market where competition is already fierce, a challenge that many retailers will be struggling to balance with unemployment, rising minimum wage, persistent inflation and rising costs. A new app on the horizon, new appointments to the leadership team and a continued focus on choice, value and retaining margins in its range stands the retailer in good stead, especially if spending does begin to recover in homewares and furniture.
“With such high competition in this category, not everyone will be sitting as comfortably as Dunelm this quarter, particularly the smaller homeware and furniture shops without the financial means to cushion the blow of a winter sales freeze. Those retailers who cannot afford to provide the right balance of value, choice and quality for meeting changing consumer demand will not get a seat at the table, and we will inevitably see challenging conditions leading to more stores shutting up shop.”
