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Dunelm Group PLC on Thursday said it still expects annual earnings in line with expectations but noted ‘ongoing cost challenges’ in the homewares market. Shares in the company fell 3.7% to 991.50 pence each in London on Thursday morning. The home furnishings retailer said total sales in the second-quarter ended December 28 rose 1.6% on-year to £490 million. For the whole of the first-half, they increased 2.4% to £894 million. ‘We are pleased with this solid performance in a market which remained volatile. We believe that we have again gained market share, demonstrating the value, relevance and choice we continue to offer our customers,’ the Leicestershire-based company said. ‘Click and collect sales grew strongly as we further increased the breadth of our ranges and the proportion of products available to be collected in stores. Our furniture categories performed particularly well, from our sofa collections through to smaller items such as dining chairs and coffee tables. Our growing range of products at outstanding price points, with attractive delivery options, continues to improve our proposition and resonate well with customers.’ Dunelm still expects pretax profit in line with the market expectation range of £207 million and £217 million. It would represent growth of at least 1.0% from £205 million in financial 2024. The company expects its gross margin to be in the ‘upper half of our guided range of 51-52%’. ‘Gross margin remains well controlled, with strong operational grip driving a 10bps year-on-year improvement. Retail prices were broadly stable in the period, as we retained discipline both on promotional activity and across our ’good, better, best’ value tiers,’ Dunelm said. The retailer said it is ‘mindful’ of measures announced by UK Chancellor Rachel Reeves in last year’s autumn budget. Although it saw a rise in the national living wage coming, the increase in employer national insurance contributions is an ‘an additional cost headwind’. ‘Initiatives to drive productivity across the business are underway, and as these initiatives mature, we anticipate mitigating the upward pressure on costs over the medium term,’ Dunelm added. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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