Home furnishings and homeware retailer Dunelm has reported a growth in half year sales but a slight decline in profit.
According to its Interim Results for the 26 weeks to 27 December 2025, total sales rose 3.6% to £926.3m from £893.7m.
Digital sales represented 41% of total revenues, increasing from 39%, while gross margin improved from 52.8% to 53.4%. Pre-tax profit resulted at £114m, down from £123.2m.
Dunelm said: “In the first half consumer confidence remained subdued, and market data pointed towards a particularly challenging December for both homewares and the UK retail sector more generally. We also saw an extremely competitive Black Friday period, both in terms of the depth of discounts and performance marketing spend.
“During this time, whilst core categories continued to drive our growth, our furniture sales, which in recent times have been a tailwind, were softer. Furniture was generally impacted by the market factors above, although certain sub-categories continued to trade well. However, the forecasting and ordering of a small number of key product lines did not match up to customer demand, resulting in availability shortfalls for those products. We have recovery plans in place.”
On products, Dunelm stated that it has successfully extended its ranges in recent years to offer greater breadth to our customers, however the vast majority of its sales now come from only half of the products it sells. “We therefore have an opportunity to make our product ranges clearer and simpler for our customers to shop.
“With a focus on our master Dunelm own-brand, and a deeper understanding of our customers’ wants and needs, rather than range extension alone, there’s lots we can do in this space.”
Dunelm added that following a softer Q2, it has seen stronger sales growth in Q3 to date, more in line with H1 as a whole.
“We remain confident in our plans for the second half, with the full launch of our app planned for spring and furniture availability recovery plans in place,” the retailer said.
“We see clear opportunities to build on our strengths with a relentless customer focus, product excellence and retail rigour. We expect PBT for FY26 to be in line with current consensus expectations.”
The expectations for FY26 PBT is £214m, with a range of £210m to £221m.
Clo Moriarty, Chief Executive Officer, commented: “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%5 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.”
Dunelm has also bolstered its Executive Team with two key new hires to support the next phase of its growth. Read more.
