Dunelm Group plc

For FY 2026, Dunelm reported total sales of GBP 1,825 million, up 3.1% year on year. Gross margin was 52.5%, up 10 basis points, and profit before tax was GBP 211 million, flat year on year; diluted EPS was 76.8 pence, also flat. Net operating costs were GBP 734 million, up 3.9%, while free cash flow increased to GBP 155 million from GBP 127 million and year-end net debt improved to GBP 95 million, with net debt to EBITDA at 0.3x. The board declared a final dividend of 28.5p per share, taking the full-year ordinary dividend to 45.5p per share, up 2.2%. Management said Q1 trading has been mixed so far, with the start of the quarter significantly impacted by extremely hot weather, though more recently trading has normalized as weather cooled and became wetter.

Clodagh Moriarty framed the year as one of disciplined execution in a difficult sector, repeatedly emphasizing “customer obsession” and the company’s push to make shopping more seamless across stores and digital channels. She highlighted progress in service, availability, product innovation, and store presentation, and said the company is becoming more ambitious about its store rollout, digital connectivity, and technology-led selling. Her tone was confident and forward-looking, pointing to the upcoming strategy plan as a way to “make our business bigger, better, and bolder.”

Karen Witts said the business delivered the cost plan it had set out, with net operating costs of GBP 734 million up 3.9% year on year as inflation, wage pressure, logistics, and marketing costs rose. She noted productivity gains of GBP 15 million, other benefits of GBP 10 million, and an incremental GBP 10 million of investment, mainly in the store estate, which helped offset those pressures. On cash, she highlighted operating cash flow of GBP 270 million, capital expenditure of GBP 43 million, and free cash flow of GBP 155 million, with year-end net debt reduced to GBP 95 million and leverage within the 0.2x to 0.6x target range. She also pointed to the dividend increase as a sign of confidence, alongside a special dividend and GBP 16 million of share repurchases for employee share schemes.

There was no formal analyst Q&A included in the transcript. The most notable forward-looking comment was management’s note that Q1 trading was mixed and initially hurt by very hot weather, before normalizing as conditions turned cooler and wetter. Management also flagged home delivery as an area to watch and said it has operational and technology changes planned to improve performance there.