Home furnishings retailer Dunelm Group has reported solid first-half growth despite a challenging trading environment, with sales for the 26 weeks ending 27 December 2025 rising 3.6% year on year to £926 million, up from £894 million in the previous period. This performance allowed Dunelm to increase its market share by 20 basis points to 7.9%, demonstrating continued outperformance against the wider homewares and furniture market.
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Digital sales rose to 41% of total revenue, reflecting strong multichannel engagement as the company prepares for the full launch of its app in the spring. Gross margin strengthened to 53.4%, largely driven by foreign exchange gains, although profit before tax fell to £114 million from £123 million due to softer trading in the second quarter and the timing of certain costs.
Free cash flow increased slightly to £171 million, benefiting from a timing advantage of £93 million, while the interim ordinary dividend rose by 3% to 17 pence per share. A special dividend of 25 pence per share was also declared, down from 35 pence the previous year. Trading in the early part of the second half has improved, with stronger sales growth in the third quarter following a successful Winter Sale and positive customer response to the new Spring ranges.
Chief Executive Clo Moriarty, who joined the business in October, highlighted the strength of Dunelm's brand and operating model, emphasising the company's potential for growth given that market share remains below 8%. She expressed confidence in the future, noting that continued focus on customer experience, product excellence, retail discipline, and digital investment will support the next phase of expansion, with full-year profit before tax expected to align with market expectations of £210 million to £221 million.
Source: www.retailgazette.co.uk
