Dunelm has described FY26 as a “solid year”. The homeware company reported 3.1% sales growth, with sales up from £1,771.0m in 2025 to £1,825.5m in 2026. Gross margin was up 10bps at 52.5%, and profit before tax was £211 million – the same figure as 2025.
Customer satisfaction was up 2.4ppts, reflecting a focus on the customer experience including the rollout of self-checkouts ,and measures to improve safety and reduce shrinkage. Digital participation was also up 2ppts to 42%; Dunelm attributes this to a digital strategy that has seen the launch of its new app and conversational commerce though its beta-level ‘Ask Dunelm’ agentic tool.
This year also saw Dunelm opening new stores in Wandsworth and Kingston-upon-Thames, and reopening the Yeovil store that was closed due to a fire.
CEO Clo Moriarty said: “We delivered a solid performance for the year, growing sales, maintaining profits and generating strong cash returns for shareholders.”
The company also revealed that it had experienced a softer start to FY27 due to the extended hot weather, although sales had picked up in recent weeks.
Three-year growth plan
Dunelm has now launched a three-year self-funded growth plan to return to mid-to-high single-digit growth by becoming “the homewares specialist with something for everyone”.
Called ‘Winning Hearts & Homes’, the plan aims to do this by increasing customer visits and the size of their spending, while also focusing on strategic investment for growth and a disciplined approach to capital allocation that keeps Dunelm within its 0.2x – 0.6x net debt : EBITDA4 ratio.
Digital is front and centre in this plan. Dunelm aims to consolidate its strengths as an omnichannel retailer by adding as many as 100 new stores to its portfolio while optimising its platforms and “creating connected, engaging experiences to build basket size and frequency.”
Ranges will also be simplified to make value credentials clearer and improve the customer experience.
“A significant opportunity”
Clo Moriarty said the company can see “a significant opportunity” that it believes it can capture through “a customer-led, self-funded plan that builds on the many strengths that have made us successful for nearly fifty years.”
“We want to reach new customers and deepen our connection with existing ones, earning more loyalty and becoming the specialist they turn to for every mission in the home, whether they are refreshing a room, solving a practical problem, or creating a space they love,” she said.
“By making it easier and more inspiring to shop with us, and investing in the capabilities we need for the future, we believe we can accelerate our growth and strengthen our market leadership.
The analysts’ view
Analysts view Dunelm’s three-year plan with a mix of long-term confidence and short-term caution. Shares dropped 10% as investors reacted to the news of a softer start to FY27. However, investment bank Peel Hunt struck a positive note.
“With revenue and profit growth stalling, Dunelm needed a reboot,” it said. “Today’s strategy provides a roadmap to take sales growth back to mid to high single-digit levels within three years, within clear margin parameters. Beyond this, we see no reason why profit margins cannot grow higher if the group continues to build market share and customer loyalty.”
Ed Bradley, chief growth officer at Virtualstock powered by Logicbroker, said the plan will test the strength of Dunelm’s digital strategy. “‘Ask Dunelm’ is a strong example of customer-facing AI done well,” he said. “The real test now is whether the operational foundation behind it scales with it.
He added: “An AI assistant can recommend a product in seconds, but it can’t compensate for fragmented systems or unreliable data behind the scenes. As Dunelm grows its range and store estate, keeping stock, pricing and fulfilment data consistent across every channel will be the difference between an assistant that delights and one that overpromises.”
Dunelm has laid out an ambitious plan to win a bigger share of the homewares market. After a year of steady results, the focus now shifts to execution.
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