Dunelm posts modest FY growth, flags lack of sustained recovery

(Sharecast News) - Homewares retailer Dunelm reported modest full-year top-line growth on Monday but noted a cautious start to the new financial year, stating that while it was "pleased with early trading", it had yet to see signs of a sustained consumer recovery. Dunelm said revenues had risen 3.8% to £1.77bn in the year ended 28 June, while pre-tax profits ticked up 2.7% to £211.0m. Gross margins improved by 60 basis points to 52.4%, supported by disciplined buying and strong sell-through of seasonal ranges. Diluted earnings per share increased 3.2% to 76.8p.

The FTSE 250-listed firm said digital sales made up 40% of total revenues, up from 37% a year earlier, driven by growth in Click & Collect and enhanced online capabilities. However, net debt, on the other hand, increased to £102.0m from £55.6m, following investment in new stores, the acquisition of Home Focus in Ireland, and the purchase of the Designers Guild brand and archive.

Dunelm proposed a final dividend of 28.0p per share, taking its FY ordinary payout to 44.5p, up 2.3%. Including a special dividend of 35.0p paid in April, total dividends declared for the year were 79.5p per share.

However, Dunelm also stated that it although it has continued to gain share in a homewares and furniture market which grew slightly for the first time since FY22, it was yet to see signs of a wider consumer recovery so far in FY26, with consumer confidence remaining "lacklustre".

Reporting by Iain Gilbert at Sharecast.com