Home furnishings retailer Dunelm has reported a growth in second quarter and half year sales.
According to its latest trading update for the 13-week period ended 27 December 2025 and for the first half, total Q2 sales rose 1.6% to £498m, while half year revenues rose 3.6% to £926m.
Dunelm said that the first half delivered a “solid performance” although Q2 was “softer” than expected due to high levels of competition in digital and discounting.
“We are reporting a solid performance for the first half, with total sales of £926m up +3.6%. Following a strong Q1, trading was more challenging in the second quarter, particularly around Black Friday and continuing into December, highlighting the ongoing challenging macroeconomic environment.
“As in recent years, we also continued to be disciplined in our promotions during this period, but this year we saw an especially high level of competitive activity in both digital marketing and discounting. As a result, Q2 sales were softer than anticipated at +1.6% year-on-year.
“Our growth in the second quarter continued to be driven by our core categories, notably bedding, towels and lighting, and Made-to-Measure again grew strongly. However, we saw softer trading in furniture, driven in part by availability challenges, against which recovery plans are in place.
“Since the end of the quarter we have seen customers respond well to our offers in the Winter Sale, with overall growth higher than we saw in Q2. Gross margin remained strong, increasing by 60bps year-on-year in the first half, which continued to be primarily driven by FX tailwinds.”
During the period, Dunelm confirmed the opening of its second inner London store in Wandsworth in Q2 and the reopening of its Yeovil store following a fire last year, with plans to open up to two further Superstores in the second half.
The new Dunelm App is also now live on both Apple and Android platforms, with a full customer launch planned for February.
The retailer now expects pre-tax profit for the first half to be approximately £112m – £114m, while for the full year, it is expected to be at the lower end of consensus expectations with a range of £214m to £227m.
Clo Moriarty, Chief Executive Officer, commented: “We delivered a solid first half, and I’m really proud of all our colleagues for their efforts over this busy period. The performance reflected a strong first quarter followed by a more challenging close to the half.
“Whilst the UK retail environment remains variable, we have acted on some clear lessons from the first half, including targeted steps to improve availability, ensuring customers can access our fantastic ranges seamlessly, however they are shopping with us.
“I see multiple opportunities to extend Dunelm’s market-leading position – there is much more in the tank. As such, we are now moving forwards with energy and discipline, actively building new plans whilst executing existing ones to ensure we are the first choice for all home lovers.”
