Dunelm Group has published a trading update for Q4 and FY26 as a whole, noting continued sales growth and cost delivery, with full year profit in line with expectations, in all delivering "a solid performance, both in the quarter and across the year", says CEO Clo Moriarty.
The group says the total sales for Q4 (the 13-week period ended 27th June 2026) were up 2.9% YoY to £428m. Dunelm's Summer Living category traded particularly strongly, both at full price and on promotion, with good sell-through across the range.
"Growth in the quarter was achieved despite trading being impacted by two separate weeks of exceptionally warm weather, during which we saw lower levels of store footfall,"the retailer adds. "The first of these also coincided with the opening week of our usual Summer Sale, which disproportionately impacted trading."
Across the full year, total sales of £1,825m grew by 3.1% on the prior year, with digital participation up to 42% (an increase of 2ppts on FY25). "This reflects the continued benefits of investment in our digital ecosystem, including the launch of our app, further enhancing customer experience and supporting growth across our channels," says Dunelm.
Gross margin is expected to end the year at 52.5%, up 10bps YoY: "This reflects our ongoing discipline and the continued benefit from an FX tailwind, partly offset by customers increasingly participating in our promotional events, especially in the second half of the financial year.
"We delivered the net operating cost plans set out in our interim results. As previously guided, YoY costs benefited from phasing impacts including the timing of our brand marketing campaign and the reduction in business rates, alongside productivity initiatives. Also as expected, full-year net operating costs include approximately £7m of insurance income, reflecting compensation received in relation to the temporary closure of two stores following serious fires.
"We expect full-year PBT to be in line with our previous guidance and current consensus expectations [£210m].
Cash generation was again strong in FY26, with c.70% of operating profit converted to free cash. "There was a small inflow for the year from working capital, with inventory in particular lower YoY," adds Dunelm. "Capex for the year is expected to be in line with previous guidance at around £40m. After dividend payments of £141m, overall there was a small net cash inflow for the year.
"We have made good progress in the quarter, moving forward with immediate opportunities to underpin growth, whilst also developing our future plans. We have continued our relentless focus on delighting our customers and are pleased to have seen our customer satisfaction score increase across the year, from an already high base.
"In the final week of the year, we opened our new 34,000 sqft superstore in Kingston-upon-Thames. This store showcases the latest iteration of our format, demonstrating an evolution towards a more inspirational Dunelm store experience, and aligning more closely to the best of Dunelm online. As previously reported, we have a stronger pipeline of store openings planned for FY27, and expect the number of new stores opened to be towards the upper end of our medium-term guidance to open between five and 10 new superstores per year.
"Alongside new space growth, we are also investing in our existing estate to enhance the customer proposition, and last week relaunched our St Albans superstore. We see scope to strengthen the estate over time through targeted refurbishment and renewal programmes, reflecting the important role stores continue to play in serving our customers.
"Continued investment in our digital ecosystem is supporting sustained growth of our digital channels. Shortly after the year end we launched a beta trial of an AI-powered shopping assistant within our app. This new functionality uses conversational commerce to help customers discover products more intuitively and engage more effectively with our product offer."
Dunelm concludes: "FY26 has been a solid year overall. In a fast-changing macroeconomic and consumer environment, we have maintained a disciplined focus on controlling the controllables, and despite some setbacks, delivered total sales growth of 3.1%, gross margin progression, PBT in line with current consensus, and further strong cash generation."
Clo Moriarty adds: “We have delivered a solid performance both in the quarter and across the year. There is, however, much more we must do to build on our core strengths and realise our untapped potential.
“From expanding and improving our store estate to continuing to innovate digitally, we’re beginning to demonstrate what a bigger, better and bolder Dunelm can look like. As the market leader in a large and highly fragmented market, we believe our best growth opportunities are still in front of us.
“There’s hard work ahead but I’m confident in the plans that we have been developing over the past nine months and excited by what comes next. We look forward to sharing more in September.”
