Furnishings and homewares retailer Dunelm has reported a growth in third quarter sales but expects full year profit to be on the lower end of expectations due to a more “uncertain external environment”.
According to its latest trading update for the 13-week period ended 28 March 2026, total Q3 sales rose 2.1% to £472m, while year-to-date revenues increased 3.1% to £1.3bn.
Dunelm said that the third quarter started well, with growth in line with its first half performance, following a good Winter Sale and a positive response to new Spring ranges. “The universal appeal of our offer continued to resonate with customers, however more recently, and particularly in March, we experienced a period of broad-based softening.
“Gross margin increased by 30bps year-on-year in the quarter. Whilst we continue to benefit from the FX tailwind seen in the first half, we also saw customers seeking value, buying into more discounted products compared to full price lines.
“In Q3 we delivered further sales and gross margin growth in an uncertain consumer environment. The cost plans set out at our Interim Results for H2 remain on track. Through our ongoing delivery of productivities and a disciplined approach to investments, we are navigating the impact of instability in the Middle East, which is expected to only have a small direct cost impact in this financial year.
“We have a strong calendar of events planned for Q4, and confidence in our ability to continue to deliver a compelling proposition to our customers. However, global events have resulted in a more uncertain external environment, and we are not assuming any immediate improvement to consumer confidence. We therefore currently expect PBT for FY26 to be towards the lower end of consensus expectations.
“We remain very confident in our ability to control the controllables, and in our long-term growth prospects; we have a strong set of assets, all of which present further opportunities. The full launch of our mobile app in Q3 gives us a new digital platform, with the opportunity to drive greater customer engagement, loyalty and enhanced experiences.
“Total downloads are now above 300k and we are encouraged by early performance on conversion and spend per transaction. We are also capitalising on the opportunity we see to accelerate growth through our store footprint, with a significantly stronger pipeline of new openings expected in our next financial year, including our Kingston-upon-Thames store which we are planning to open in the summer.”
Dunelm expects FY26 PBT to be £213m, with a range of £210m to £217m.
Clo Moriarty, Chief Executive Officer, commented: “We saw further sales growth in Q3, against an uncertain backdrop for both customers and businesses.
“Although the external environment is not helpful in the short term, we continue to focus on the areas within our control – strengthening our proposition while operating efficiently and effectively. Alongside this, we are making good progress building our long‑term growth plans with some exciting developments beginning to emerge, including a much stronger store opening pipeline and some encouraging early results from our recently launched app.
“Our final quarter provides multiple opportunities for Dunelm to stay front of mind for customers, including our popular Summer Sale. We remain confident that our comprehensive offer will continue to resonate with homelovers.”
