Dunelm reports that it enjoyed strong sales growth of +6.3% (to £462m) in Q3 (ended 29th March 2025), with broad-based growth across its homewares and furniture categories.
"Our sales and volume growth was broad-based across our categories, and we saw a good start to our new spring/summer ranges, as well as a successful winter Sale at the beginning of the period," Dunelm explains. "Furniture categories again performed particularly well, as our extended ranges and bolder designs resonated with customers.
"Alongside this, we continued to grow our core textile-focused categories, from pillows to rugs, reflecting the ongoing work we are doing to elevate our products, offering quality at all price points.
"Digital participation was up 4ppts YoY to 41%, as we have continued to optimise the online customer experience, with AI-powered search and recommendations improving relevance and conversion. Performance was also driven by strong click and collect sales, which again grew significantly in the quarter, benefiting from extended ranges and further optimisation of our fulfilment channels, with smaller items of furniture now available."
Gross margin improved by 30bps YoY, as the retailer continues to "exercise operational grip on input costs, and with prices held broadly stable, customers continue to find great value in our ranges at all price/quality tiers. Our full-year gross margin guidance is unchanged, at between 51.5% and 52.0%".
The retailer explains that it has made further progress with its strategic priorities. Product developments include the new Sophie Robinson collaboration, which offers "bolder, more colourful options, giving customers new ideas on how to create a maximalist look across their home" – while the relatively warm spring weather has helped drive the performance of its Summer Living ranges, as customers prepare their gardens for summer.
"We are continuing to connect with more customers, increasingly using data and insight to drive decision-making across the business, from enhancing our digital customer experience to expanding our store portfolio," the retailer continues. "In the quarter, we opened two new stores – a larger superstore in Merthyr Tydfil and a smaller superstore in Bracknell, and we relocated our Peterborough superstore to an improved site after the period end.
"The total estate now comprises 200 stores, and whilst this is a notable milestone, we continue to seek out new opportunities to bring Dunelm to more customers. We are on track with our plans to open five new superstores in the full year (including one relocation).
"We have also completed a freehold acquisition in Kingston upon Thames, a key target area of ‘white space’, which we expect to open as a Dunelm store in FY26. As guided at our interim results in February, as a result of this acquisition we now expect capex for the year to be between £60m and £70m.
"Maintaining our focus on harnessing our operational capabilities, we have also started the rollout of self-service tills across the estate, including in all of our new superstores, and with plans to install in over 100 stores by the end of FY26."
In all, Dunelm says it delivered a strong sales performance in Q3, in terms of both quantity and quality. "At the same time," it continues, "we have continued to offer outstanding value to our customers, increasing volumes and gross margin YoY, with growth across our categories.
"We are pleased that our own performance and that of the wider market has been stronger in Q3 than we saw in the first half, however it is too early to say whether or not we are seeing an improved trend. We are also mindful of increased levels of uncertainty and volatility in the current environment, and the known labour cost headwinds. We remain confident in our plans and the strategic progress we are making, and are on track to achieve our milestone of 10% market share in the medium term."
CEO Nick Wilkinson comments: “We’ve had a good third quarter, with strong growth and further strategic progress. The Dunelm brand continues to attract a broad range of customers, offering outstanding value and quality, and we’re really pleased with how our new ranges are being received.
“We remain committed to driving market share gains through growth across all our channels. March saw the opening of Dunelm’s 200th store in Merthyr Tydfil, an exciting milestone, and we continue to see new opportunities, filling ‘white space’ in our physical estate through a variety of store formats. At the same time, we’re improving customers’ digital experience, including through click and collect, which has continued to gain momentum.
“Our customers are now enjoying getting their homes and gardens ready for summer and we’re focused on being as relevant as possible for the warmer months ahead. We remain very mindful of the wider backdrop and the impact of increased uncertainty on consumer sentiment, but maintain our focus on strengthening Dunelm’s position as The Home of Homes.”
Dunelm expects PBT for FY25 to be in line with consensus, at £208m.
