Homewares retailer Dunelm enjoyed “solid first half trading” despite profits dipping in what it called a “challenging environment”.

For the 26 weeks to December 27, 2025, the retailer’s profit before tax dropped 7.5% to £114m, reflecting the “softer trading in Q2 and the timing of certain costs”, Dunelm said.

Despite this, sales for the period grew 3.6% to £926m, ahead of the combined homewares and furniture market, while market share for the period jumped 20 basis points to 7.9%.

Digital sales as a total percentage of revenues jumped two percentage points to 41%, free cash flow was £171.4m, although net cash for the period plummeted £43.8m to £13.3m.

In terms of current trading, Dunelm said it had seen strong sales growth in Q3 to date, more in line with the first half as a whole.

It said that while the “consumer environment remains challenging, with variable trading patterns”, the retailer remains “confident in our plans for the second half”, with the launch of its app earmarked for the spring and plans to recovery furniture availability in place.

Dunelm said it expects profit before tax for the 2026 full year to be in line with current consensus expectations.

Chief executive Clo Moriarty said: “Since joining Dunelm in October, I’ve been struck by the magic that has turned this very special business from a market stall into a market leader. Dunelm is a universal brand with something for everyone, powered by a compelling combination of physical stores, a growing digital platform, and passionate colleagues who care deeply about delivering for customers.

“We delivered a solid first‑half performance despite a softer second quarter, and we are seeing stronger sales growth in early Q3 following a good winter sale and an encouraging response to our new spring ranges.

“What I’ve seen so far gives me real confidence in our future. With only 7.9% market share and clear opportunities to enhance and expand our assets, we have significant headroom for growth. We will build on our existing strengths with relentless customer focus, product excellence and retail rigour, underpinned by the financial discipline for which Dunelm is known. There is much more in the tank, and I’m excited for what lies ahead.”

Topics