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Dunelm Group PLC on Thursday warned its annual pretax profit is expected to be at the lower end of market expectations after a softer second quarter of the financial year. In response, shares in the Leicestershire, England-based homewares retailer plunged 17% to 971.00 pence each in London on Thursday morning, hitting an intraday low of 956.00p. The wider FTSE 250 index was up 0.4%. Dunelm said total sales rose 1.6% year-on-year in the 13 weeks to December 27, bringing first-half sales to £926 million, up 3.6%. Digital sales accounted for 42% of quarterly revenue of £498 million. It was 41% of six-month revenue of £926 million. Gross margin for the half increased by 60 basis points, helped by favourable currency movements, Dunelm said. However, trading in the second-quarter was softer than anticipated, ‘particularly around Black Friday and continuing into December, highlighting the ongoing challenging macroeconomic environment’, Dunelm said. An ‘especially high level of competitive activity in both digital marketing and discounting’ meant that second-quarter sales were ‘softer than anticipated.’ Growth in the second quarter continued to be driven by core categories, notably bedding, towels and lighting, and made-to-measure again grew strongly. However, Dunelm saw softer trading in furniture, driven in part by availability challenges, against which recovery plans are in place, it said. Dunelm expects pretax profit of £112 million to £114 million for the first half and now forecasts financial 2026 pretax profit to land at the lower end of the analyst consensus range of £214 million to £227 million. Dunelm’s first half ends in late December and its full year in late June. Interim pretax profit was £123.0 million in financial 2025 and full-year profit was £211.0 million. Chief Executive Clo Moriarty said: ‘The performance reflected a strong first quarter followed by a more challenging close to the half.’ More positively, Dunelm said Winter Sale trading has been stronger than in the second-quarter. Moriarty said: ‘Whilst the UK retail environment remains variable, we have acted on some clear lessons from the first half, including targeted steps to improve availability...I see multiple opportunities to extend Dunelm’s market-leading position - there is much more in the tank. As such, we are now moving forwards with energy and discipline.’ Copyright 2026 Alliance News Ltd. All Rights Reserved.
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