Dunelm has seen annual sales move closer to £2bn, along with higher margins.
The progress is despite shoppers increasingly waiting for seasonal sales before committing to purchases.
The chain saw sales rise by 2.9% in the fourth quarter and by 3.1% to £1.825bn in the year to 27 June.
Gross margin rose by 10bps to 52.5%, which the group says ‘reflects our ongoing discipline and the continued benefit from an FX tailwind, partly offset by customers increasingly participating in our promotional events, especially in the second half of the financial year.’
‘Growth in the quarter was achieved despite trading being impacted by two separate weeks of exceptionally warm weather, during which we saw lower levels of store footfall. The first of these also coincided with the opening week of our usual summer sale, which disproportionately impacted trading.
‘Our cash generation was again strong in FY26, with c70% of operating profit converted to free cash. There was a small inflow for the year from working capital, with inventory in particular lower year-on-year. Capex for the year is expected to be in line with previous guidance at around £40m. After dividend payments of £141m, overall there was a small net cash inflow for the year.
‘We have made good progress in the quarter, moving forward with immediate opportunities to underpin growth, whilst also developing our future plans. We have continued our relentless focus on delighting our customers and are pleased to have seen our customer satisfaction score increase across the year, from an already high base.’
‘We have delivered a solid performance both in the quarter and across the year. There is, however, much more we must do to build on our core strengths and realise our untapped potential,’ says Clo Moriarty, Dunelm ceo.
‘From expanding and improving our store estate to continuing to innovate digitally, we’re beginning to demonstrate what a bigger, better and bolder Dunelm can look like. As the market leader in a large and highly fragmented market, we believe our best growth opportunities are still in front of us.
‘There’s hard work ahead but I’m confident in the plans that we have been developing over the past nine months and excited by what comes next.’
