Investing.com — UK’s homewares retailer maintained its full-year profit outlook despite a challenging second quarter, while also announcing a higher-than-expected special dividend.
The company reported first-half profit before tax of £114 million, down 7.5% YoY but at the top end of its guidance range and slightly ahead of analyst consensus. Revenue rose 3.6% to £926.3 million, with digital sales now accounting for 41% of total sales, up 2 percentage points from the previous year.
Dunelm’s market share increased by 20 basis points to 7.9%, demonstrating continued growth despite what the company described as a “subdued” market environment. Gross margin improved by 60 basis points to 53.4%, primarily driven by favorable foreign exchange rates.
“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,” said Clo Moriarty, Chief Executive Officer, who joined the company in October 2025.
The company’s shares rose following the results announcement, as investors welcomed the maintained full-year profit guidance and the special dividend of 25 pence per share, which was higher than analysts had forecast. Dunelm also increased its interim ordinary dividend by 3% to 17 pence per share.
Looking ahead, Dunelm expects profit before tax for the full year to be in line with current consensus expectations of £214 million. The company plans to fully launch its app this spring and has recovery plans in place to address furniture availability issues that contributed to softer Q2 performance.
“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,” Moriarty added.