Dunelm Group reported fiscal 2026 pre-tax profit of £211 million, unchanged from the prior year, as total sales rose 3.1% to £1,825.5 million from £1,771.0 million. Diluted earnings per share were flat at 76.8 pence, and the pre-tax margin was 11.6%, compared with 11.9% in fiscal 2025. Chief executive Clo Moriarty and finance director Karen Witts presented the results on September 8, 2026. Over five years, pre-tax profit has ranged from £192.7 million to £212.8 million, while diluted EPS has moved between 74.4 pence and 83.6 pence.
Free cash flow increased 21.5% to £154.8 million from £127.4 million, lifting conversion of operating profit to 69% from 57%. Net debt improved to £94.6 million from £102.0 million, equivalent to 0.3 times EBITDA and within the company's 0.2x to 0.6x target range, compared with £23.8 million in fiscal 2022.
Sales growth was supported by a 10 basis point increase in market share to 7.9% in a UK homewares and furniture market estimated by GlobalData at about £25 billion. Gross margin expanded by 10 basis points to 52.5%, compared with 51.2% in fiscal 2022. Net operating costs rose to £734.1 million, or 40.2% of sales, up 30 basis points from 39.9%. Five-year sales growth was about 3.6% annually, from £1,581.4 million in fiscal 2022.
Digital participation rose two percentage points to 42% of total sales. Home delivery sales grew 9.1%, while store-enabled like-for-like sales increased 0.8%; excluding Click & Collect and in-store tablet sales, the comparable measure fell about 2%. The mobile app, launched in February 2026, produced a 4.3% conversion rate, 51% higher than the 2.9% rate for non-app digital channels, and an average order value of £97, 42% above the £69 average for other digital channels. Self-checkout rollout was 85% complete across the estate.
Costs included roughly 3% wage inflation, adding £23 million to the cost base, and £19 million of volume-driven costs, mainly in performance marketing and distribution. Space growth added £10 million, while productivity improvements delivered £15 million of savings and other benefits totaled £10 million, including £3 million of higher insurance income and lower performance-related remuneration.
Capital expenditure was £42.7 million, down from £67.3 million, including £27 million for new stores and improvements to the existing estate. Net interest and loan transaction costs rose to £13.9 million from £10.6 million, lease liability repayments increased by £8.4 million to £59.0 million, and inventories fell to £212.1 million from £226.3 million.
The final ordinary dividend was 28.5 pence per share, taking total ordinary dividends for the year to 45.5 pence, up 2.2% from 44.5 pence. A 25 pence special dividend, paid in April and lower than the 35 pence paid in the prior year, brought total dividends to 70.5 pence. Total dividends paid during fiscal 2026 were £141.0 million, compared with £159.4 million in the prior year, and ordinary dividend cover was 1.7 times earnings per share.
Customer satisfaction improved by 2.4 percentage points overall, with store satisfaction up 3 percentage points and Click & Collect satisfaction up 6 percentage points. Home delivery satisfaction fell by 1 percentage point because of third-party courier performance issues.
Environmentally, Scope 1 emissions intensity fell 58% from the fiscal 2019 baseline and Scope 3 emissions intensity fell 20%. The company said 78% of own-brand cotton was more responsibly sourced, against a target of 100% by fiscal 2030. It raised £2 million for Age UK, donated about 200,000 gifts through its Delivering Joy winter campaign, and raised £1 million for the British Heart Foundation through furniture and mattress second-life programs. Ethnic minority representation among role-model leaders increased by 90 basis points to 7.4%.
