Dunelm Group (DNLM) H2 2025 earnings summary

Executive summary

• Sales increased 3.8% year-over-year to £1,771m, with digital sales participation rising to 40% and market share reaching 7.9%.

• Profit before tax rose 2.7% to £211m, with a stable PBT margin of 11.9% and diluted EPS up 3.2% to 76.8p.

• Opened first inner London store, expanded internationally with Irish acquisitions, and acquired Designers Guild brand.

• Strong cash generation supported higher capital investment, increased dividends, and ongoing digital enhancements.

• Leadership transition announced, with Clodagh Moriarty set to become CEO.

Financial highlights

• Gross margin improved by 60bps to 52.4% year-over-year.

• Free cash flow was £127.4m, down from £132.2m due to higher capex.

• Net debt at £102m, with net debt/EBITDA at 0.3x.

• Total dividends declared were 79.5p per share, including a special dividend.

• Operating cash flow up 10% year-over-year to £256m.

Outlook and guidance

• FY26 capex expected around £50m for 5–10 new superstores and continued refits.

• Early FY26 trading is positive, but no signs yet of a sustained consumer recovery.

• Launch of a new customer app planned for autumn.

• Confident in further market share gains, targeting 10% in the medium term.

• Working capital expected to be broadly neutral, with a timing benefit of £90m at H1 end.