Dunelm Q1 sales jump despite soft market

15th Oct 2026 07:51

(Sharecast News) - Homeware retailer Dunelm reported a jump in first-quarter sales on Thursday despite despite a soft market.

In the 13 weeks to 26 September, sales rose 1.1% year-on-year to £433m, with stronger trading in the second half of the quarter, as the earlier part was hit by hot weather. Sales were down around 3% year-on-year in the first six weeks due to exceptionally warm weather, before returning to growth of around 4% in the final seven weeks.

"Despite the challenging trading backdrop, we believe we continued to outperform an overall soft market," Dunelm said.

The retailer said most categories saw a similar trading pattern. However, the made to measure segment delivered double-digit growth, "supported by excellent execution from our specialist store colleagues". Cook and Dine also performed well, particularly in the second half of the quarter, thanks to the success of recent range reviews and product refreshes.

The company hailed strong margin progression, with gross margin up 10 basis points year-on-year in the first quarter, benefiting from an FX tailwind.

Dunelm said that while the consumer backdrop remains uncertain, it is encouraged by the improvement in trading through the latter part of the quarter as it enters its peak trading period.

"At this early stage in the year, our expectations for FY27 adjusted profit before tax remain unchanged and broadly in line with FY26," it said. "As our plans gather momentum, and with benefits weighted towards the second half of the year, we currently expect adjusted profit before tax to be lower than the prior year for the first half."

Chief executive Clo Moriarty said: "I'm encouraged by the momentum we built as the quarter progressed, following the impact of the exceptionally warm weather.

"We are making good progress with Winning Hearts & Homes, our plan to create a bigger, better and bolder Dunelm. We're taking clear actions to build a stronger customer proposition and create the capabilities needed to support our long-term growth. The early signs are encouraging and reinforce our confidence in the opportunity ahead.

"As customers turn to cosy evenings, seasonal celebrations and spending more time at home, we're looking forward to helping them enjoy those moments through our peak trading period."

At 0930 BST, the shares were up 6.9% at 856.50p.

Chris Beauchamp, chief market analyst at IG, said: "The rise in total sales for Q1 against a strong previous year is a creditable performance from Dunelm, and the shares have responded accordingly. Understandably no one was keen to think about soft furnishings during the summer's heatwave madness, but with the cooler weather trading has improved.

"Dunelm remains cheap relative to its five-year average, but sentiment could quickly recover if it can continue to show signs of progress after a disappointing couple of years."

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