Dunelm has reported a solid finish to FY26, with total-year sales rising 3.1% to £1.83 billion. The company says this reflects its investment in its digital capabilities, highlighting the launch of its app earlier this year, which has enhanced customer experience and provided support across multiple channels.
Fourth-quarter sales up on last year
In a trading update covering the 52 weeks to 27 June 2026, the retailer said fourth-quarter sales increased 2.9% year-on-year to £428m. Digital participation reached 45% of sales during the quarter, up three percentage points from the previous year, while full-year digital sales accounted for 42% of total revenue.
Dunelm said demand was particularly strong in its Summer Living category, although store footfall was affected by the two-week spring heatwave. One of those weeks coincided with the launch of its Summer Sale, which added to the disruption.
Despite these headwinds, the retailer expects full-year pre-tax profit to be in line with market expectations of around £210m. Gross margin is forecast to rise by 10 basis points to 52.5%, supported by disciplined management and favourable foreign exchange movements.
The company also highlighted strong cash generation, with around 70% of operating profit converted into free cash flow. Following dividend payments totalling £141m, Dunelm reported a small net cash inflow for the year.
Looking ahead
The company is pushing ahead with physical retail expansion plans alongside its digital strategy. It has just opened a new 34,000 sq ft superstore in Kingston-upon-Thames that it says aligns with its concept of an “inspirational Dunelm store experience.” It says that it expects store openings in FY27 to be towards the upper end of its target range of five to 10 new superstores annually.
The business has also launched a beta version of an AI-powered shopping assistant within its app, designed to help customers discover products through conversational commerce.
New chief executive Clo Moriarty said the retailer had delivered “a solid performance” but remained focused on unlocking further growth opportunities. “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,” she said.
Commenting on the results, investment bank Peel Hunt noted that “consumers are still more heavily motivated by sale events and promotions” but added that they “continue to view three-year forecast expectations as numbers to be beaten.”
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