16th Apr 2026 08:56
(Alliance News) - Dunelm Group PLC on Thursday reported a rise in third quarter sales, but shares fell as it predicted annual profit at the lower end of expectations.
Dunelm shares fell 5.7% to 800.00 pence each in London on Thursday morning.
The Leicester-based homewares retailer said sales in the 13 weeks to March 28 rose 2.1% on-year to GBP472 million. Year-to-date, sales are 3.1% higher at GBP1.40 billion. Growth picked up from 1.6% in the second quarter, but was slower than the 6.2% stride in the first. It was also cooler than the 6.3% rise in the third quarter a year prior.
"As previously reported, the third quarter started well, with growth in line with our first half performance, following a good winter sale and a positive response to new spring ranges. The universal appeal of our offer continued to resonate with customers, however more recently, and particularly in March, we experienced a period of broad-based softening," Dunelm said. "Gross margin increased by 30bps year-on-year in the quarter. Whilst we continue to benefit from the FX tailwind seen in the first half, we also saw customers seeking value, buying into more discounted products compared to full price lines."
Dunelm said it is "navigating the impact of instability in the Middle East". It expects only a "small direct cost impact in this financial year".
"We have a strong calendar of events planned for Q4, and confidence in our ability to continue to deliver a compelling proposition to our customers. However, global events have resulted in a more uncertain external environment, and we are not assuming any immediate improvement to consumer confidence," it added.
As a result, it expects pretax profit for financial 2026 to be towards the lower end of consensus expectations, which span GBP210 million to GBP217 million. In the year ended June 2025, pretax profit increased 2.7% to GBP211.0 million from GBP205.4 million.
Dunelm added: "We remain very confident in our ability to control the controllables, and in our long-term growth prospects; we have a strong set of assets, all of which present further opportunities. The full launch of our mobile app in Q3 gives us a new digital platform, with the opportunity to drive greater customer engagement, loyalty and enhanced experiences.
"Total downloads are now above 300k and we are encouraged by early performance on conversion and spend per transaction. We are also capitalising on the opportunity we see to accelerate growth through our store footprint, with a significantly stronger pipeline of new openings expected in our next financial year, including our Kingston-upon-Thames store which we are planning to open in the summer."
By Eric Cunha, Alliance News news editor
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