Dunelm Group plc (LSE:DNLM) has reported a 1.1% increase in sales to £433 million for the first quarter of its 2027 financial year, with trading improving during the latter part of the period following an initially slower start.
The UK homewares retailer attributed the early trading slowdown partly to exceptionally warm weather, which affected demand across certain product categories.
Store-enabled like-for-like sales declined by 0.8% compared with the corresponding period last year, while total sales increased, reflecting contributions from the group’s wider retail operations.
Dunelm reported a 10 basis point improvement in gross margin during the quarter, supported in part by favourable foreign exchange movements.
The company said its sales performance continued to exceed that of the wider homewares market, which it characterised as subdued during the reporting period.
Trading varied across product categories, with made-to-measure services recording double-digit sales growth.
The cook-and-dine category also benefited from recent product range reviews and the introduction of updated merchandise, according to the company.
Digital sales accounted for 41% of total revenue during the quarter, an increase of one percentage point compared with the same period last year.
The higher digital contribution reflects continued activity across Dunelm’s online shopping, home delivery and Click & Collect services, which operate alongside its physical store network.
Customer satisfaction scores improved by 0.5 percentage points during the period, according to the retailer’s reported measures.
Alongside its trading activities, Dunelm continued implementing its Winning Hearts & Homes strategy, which includes investment in stores, digital capabilities and operational processes.
The group progressed its store renewal programme and new store openings, including a substantial refurbishment of its Doncaster location.
Dunelm also expanded the use of radio-frequency identification (RFID) technology across selected product categories, with the aim of improving inventory visibility, stock availability and operational efficiency.
In addition, the company introduced artificial intelligence-enabled tools within its customer contact centre to support customer service operations.
The investments form part of Dunelm’s programme to integrate its physical retail network with digital services and improve internal operating processes.
Looking ahead, management maintained its expectations for adjusted profit before tax for FY27, which is forecast to remain broadly in line with the previous financial year.
The company expects first-half profitability to be lower than the corresponding period last year, with the anticipated financial benefits from its strategic initiatives weighted towards the second half.
Dunelm said it remains focused on implementing its store, digital and operational investment programmes while monitoring trading conditions across the UK homewares market.
About Dunelm Group plc
Dunelm Group plc (LSE:DNLM) is a UK homewares retailer offering furniture, bedding, curtains, blinds, kitchenware, lighting and home accessories, alongside specialist made-to-measure services.
Founded in 1979 and headquartered in Leicester, the company operates 204 stores across the UK and Ireland and employs approximately 12,000 people.
Its retail operations combine physical stores with online shopping, home delivery, Click & Collect services and the Dunelm mobile application.
The group’s product offering consists predominantly of own-brand merchandise across a range of home furnishing and household categories.
Dunelm’s Winning Hearts & Homes strategy focuses on developing its homewares offering, expanding digital capabilities, improving customer services and investing in operational technology.
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