Dunelm Sees Solid H1 But Softer Q2 Amid Competitive Pressure

Dunelm Sees Solid H1

UK: Homewares retailer Dunelm reported a “solid first half” performance in a challenging UK retail environment, while signalling that full-year profits are likely to come in at the lower end of expectations following a softer second quarter. For the period ended 27 December 2025, total sales reached GBP 926m (USD 1,176m), up from GBP 894m (USD 1,135m) in the same period last year. Performance was supported by a strong first quarter, but trading weakened in the second quarter, particularly around Black Friday and continuing into December. Despite maintaining disciplined promotional activity, Dunelm highlighted an especially high level of competitive pressure in digital marketing and discounting, resulting in second-quarter sales growth of +1.6% year-on-year, softer than anticipated.

Growth in the second quarter continued to be driven by core categories such as bedding, towels and lighting, with Made-to-Measure performing strongly, while furniture sales were softer, partly due to availability challenges, for which recovery plans are underway. Pre-tax profit for the first half is expected to be approximately GBP 112m–GBP 114m (USD 142m–145m), and full-year profit before tax is now forecast at the lower end of consensus expectations. CEO Clo Moriarty said the company had acted on lessons from the first half, including targeted steps to improve product availability, and added that despite variable market conditions, Dunelm sees multiple opportunities to extend its market-leading position and continues to move forward with energy and discipline.

Source: East Midlands Business Link