Dunelm (LSE:DNLM) reported sales of £1.83 billion for the 52 weeks ended 27 June 2026, an increase of 3.1% year-on-year, while profit before tax was unchanged at £211 million.
The homewares retailer increased its market share to 7.9%, while gross margin improved to 52.5%. The company said inflationary pressures and costs associated with sales volumes affected profitability during the year.
Free cash flow increased to £154.8 million and net debt declined to £94.6 million.
Dunelm increased its ordinary dividend, although total distributions to shareholders were lower than in the previous year because of a smaller special dividend.
Digital Sales Reach 42% of Revenue
Digital sales accounted for 42% of group revenue during the year as Dunelm continued to invest in its online operations.
The company launched the Dunelm app and introduced a beta version of an artificial intelligence-powered shopping assistant.
Dunelm also reported higher online conversion, increased store footfall and improved customer satisfaction.
The group opened two new stores during the financial year and reopened its Yeovil location following a fire. Dunelm operates 204 stores across the UK and Ireland alongside its digital channels.
Dunelm Launches Winning Hearts & Homes Strategy
Following a review of the business, Dunelm launched a new customer-focused growth strategy called Winning Hearts & Homes.
The company said the self-funded strategy is intended to support growth and strengthen its position in the homewares market. Investment will focus on capabilities and customer experience across its stores and digital operations.
Chief executive Clo Moriarty said the review identified additional growth opportunities for the business.
Dunelm plans to provide analysts and investors with further details on the strategy, including medium-term targets and guidance for the 2027 financial year.
Hot Weather Affects Early FY27 Trading
Dunelm reported softer trading during the opening weeks of FY27, which the company attributed to unusually hot weather.
Management said it remains confident in the underlying characteristics of the business as it begins implementing the Winning Hearts & Homes strategy.
The company’s next trading update is scheduled for mid-October, when it is expected to provide further information on current trading.
More about Dunelm Group plc
Dunelm Group plc is a UK homewares retailer offering products across furniture, soft furnishings, kitchenware, lighting, outdoor living, decoration and DIY, with a large proportion of its range sold under its own brands.
Founded in 1979 and headquartered in Leicester, the group operates 204 stores across the UK and Ireland and employs around 12,000 people.
Its omnichannel operations include home delivery, Click & Collect, the Dunelm app and its store network. The company also provides specialist services including made-to-measure window products.
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