Dunelm sales cushioned by strong furniture demand

Homeware retailer Dunelm has reported a robust start to 2025, with sales increasing by 6.3% to £462 million in the third quarter. The positive performance for the furniture and homewares business was driven by strong demand for its seasonal collections and furniture, despite ongoing uncertainty in the consumer environment. This growth underscores Dunelm’s strong position in the retail market, particularly in the home furnishings sector.

Dunelm Achieves Sales Uplift in Q3 2025

The homewares company announced that its turnover saw a 6.3 percent rise, reaching £462 million during the 13-week period ending on March 29th. This result means Dunelm’s total revenue has expanded by 3.7 percent to approximately £1.4 billion in the current financial year to date.

Digital Sales Continue to Grow

A notable aspect of Dunelm’s Q3 performance was the expansion of its digital sales. The proportion of orders placed online climbed by four percentage points to 41 percent of total sales in the third quarter. The company indicated that this increase was partly attributable to a wider selection of products available online, as well as the appeal of click-and-collect for smaller furniture items.

Furniture and Seasonal Ranges Drive Demand

According to Dunelm, furniture product lines experienced particularly strong sales. In addition to furniture, textile-based products, such as cushions and rugs, also demonstrated considerable popularity among consumers.

The retailer also highlighted the success of its winter clearance event, followed by an encouraging commencement to its spring/summer range sales, as warmer weather stimulated purchases of garden-related merchandise.

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Profit Forecasts Aligned with Expectations

Following these positive trading figures, the Leicestershire-based company anticipates that its pre-tax profits for the full year will be in line with current market consensus, estimated to be between £204 million and £214 million.

Share Price Reacts Positively

Investor confidence in Dunelm was evident as Dunelm Group shares experienced a significant surge of 6.2 percent, reaching £10.07 in Thursday morning trading. This performance made Dunelm the top-performing stock within the FTSE 250 Index.

CEO’s Statement on Performance and Outlook

Nick Wilkinson, Chief Executive of Dunelm, commented on the results, stating, “We’ve had a good third quarter, with strong growth and further strategic progress.”

He further added, “The Dunelm brand continues to resonate with a diverse customer base, offering exceptional value and quality, and we are very encouraged by the customer response to our new product ranges.”

However, Mr. Wilkinson also acknowledged the broader economic picture, noting that the company remains “very mindful of the wider backdrop and the potential impact of heightened uncertainty on consumer sentiment.”

Leadership Transition at Dunelm

As previously announced in February, Nick Wilkinson is set to step down from his position as CEO later in the year, after a tenure of seven years. A successor to Mr. Wilkinson has not yet been named by the company.

Growth Under Wilkinson’s Tenure

During Mr. Wilkinson’s leadership, Dunelm’s annual turnover has more than doubled, driven by the expansion of online sales, the growth of its store network, and the surge in home improvement spending by UK consumers during the Covid-19 pandemic related lockdowns in 2020 and 2021.

Sales have continued to climb even after the easing of pandemic restrictions, increasing by 4.1 percent to £1.7 billion in the last financial year. This ongoing growth has been supported by strong demand from younger demographics and increased purchases of kitchenware and upholstered furniture.

Analyst Perspective

Russ Mould, Investment Director at AJ Bell, offered his analysis: “In the retail sector, getting the fundamentals right is crucial. Dunelm, with its latest product ranges, appears to be offering products that are desirable to consumers at an appealing price point.”

He continued, “The company’s ongoing strategy of store expansion and enhancements to its digital platform are also proving beneficial.”

Mr. Mould concluded, “Currently, these factors seem to be providing Dunelm with resilience against the effects of increasing macro-economic uncertainty, which could otherwise represent a challenge to household discretionary spending.”

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