Dunelm has reported a solid end to its 2025/26 financial year, with sales rising 3.1 per cent to £1.83bn as continued digital investment, disciplined cost control and strong cash generation helped the homewares retailer meet profit expectations.
For the 13 weeks to 27 June, fourth-quarter sales increased 2.9 per cent to £428m despite two periods of exceptionally warm weather that reduced store footfall, including during the opening week of the retailer’s Summer Sale. The retailer said strong demand across its Summer Living range helped offset those challenges.
Digital channels continued to play an increasingly important role in the business, accounting for 45 per cent of Q4 sales and 42 per cent of full-year revenue, up two percentage points year on year. Dunelm said this reflected ongoing investment in its digital ecosystem, including the launch of its mobile app.
Gross margin improved by 10 basis points to 52.5 per cent, while the business delivered its planned operating cost savings. Pre-tax profit is expected to be in line with previous guidance and analyst consensus of around £210m, supported by strong cash generation, with approximately 70 per cent of operating profit converted into free cash flow.
The retailer also highlighted progress against its longer-term growth strategy. During the quarter, it opened a new 34,000 sq ft superstore in Kingston-upon-Thames, showcasing its latest store format, and relaunched its St Albans superstore as part of a wider refurbishment programme. Dunelm expects to accelerate store expansion in FY27, with openings towards the upper end of its target of five to ten new superstores annually.
Alongside investment in its physical estate, Dunelm has begun trialling an AI-powered shopping assistant within its app. The conversational commerce tool is designed to help customers discover products more intuitively and improve engagement with the retailer’s online range. FY26 Q4 TU – 16.07.2026
Chief executive Clo Moriarty said the business had delivered a solid year but believed there was a significant opportunity still ahead: “From expanding and improving our store estate to continuing to innovate digitally, we’re beginning to demonstrate what a bigger, better and bolder Dunelm can look like. As the market leader in a large and highly fragmented market, we believe our best growth opportunities are still in front of us.”
Share