Dunelm Group plc (DNLMY)
OTHER OTC:DNLMY
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Dunelm Group
(OTC:DNLMY)
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Rating:63Neutral
Price Target:
$11.50
▼(-20.96% Downside)
Action:ReiteratedDate:02/10/26
The score is supported by solid underlying profitability/cash generation and attractive shareholder yield/valuation, but is held back by balance-sheet leverage risk and clearly bearish technical momentum. The earnings update is constructive on guidance and margins, though near-term demand and cost pressures remain meaningful.
Positive Factors
Margin Sustainability
A 60bp gross margin uplift to 53.4% indicates durable pricing and product‑mix advantages, supported by historical gross margins (~52%). Strong gross margins provide ongoing structural protection for operating profits, enabling reinvestment in omnichannel and customer experience despite cost cycles.
Negative Factors
Balance Sheet Leverage
Elevated leverage and a low equity ratio are material structural risks to financial flexibility. Underlying net debt (~£80m after timing adjustments) restricts capacity for countercyclical investment, increases sensitivity to interest cost changes, and reduces buffer against prolonged consumer weakness.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Sustainability
A 60bp gross margin uplift to 53.4% indicates durable pricing and product‑mix advantages, supported by historical gross margins (~52%). Strong gross margins provide ongoing structural protection for operating profits, enabling reinvestment in omnichannel and customer experience despite cost cycles.
Read all positive factors
Dunelm Group (DNLMY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.28B
Dividend Yield6.4%
Average Volume (3M)0.00
Price to Earnings (P/E)6.6
Beta (1Y)0.69
Revenue Growth6.66%
EPS Growth6.21%
CountryUS
Employees12,000
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.56
Shares Outstanding201,313,030
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio5.62
Price to Book (P/B)19.70
Price to Sales (P/S)1.32
P/FCF Ratio10.61
Enterprise Value/Market Cap0.85
Enterprise Value/Revenue1.08
Enterprise Value/Gross Profit2.14
Enterprise Value/Ebitda7.35
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Dunelm Group Business Overview & Revenue Model
Company Description
Dunelm Group plc is a leading UK home furnishings retailer, specializing in a wide range of products for the home, including bedding, curtains, furniture, and home decor. Established in 1979, the company operates both physical stores and an online...
How the Company Makes Money
Dunelm primarily makes money by retailing homewares and furnishings products to consumers in the UK. Its core revenue stream is product sales through two main routes: (1) physical stores, where customers purchase items directly and may use in-stor...
Dunelm Group Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 08, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial update: sales growth, margin expansion (+60bps to 53.4%), market share gains (+0.2pp to 7.9%), improved CSAT (+2.6pp), strong free cash flow (GBP 171m) and disciplined capital returns (increased interim dividend plus special dividend). Management acknowledged near-term challenges—softer Q2 trading, a GBP 9m PBT decline, higher H1 operating costs, temporary working capital timing effects, and initial forecasting issues in furniture—but laid out remediation actions (availability recovery to ~95%), productivity plans, reduced CapEx guidance and confidence in delivering full-year PBT in line with consensus. Overall, positives (margin, cash generation, customer metrics, strategic initiatives and recovery actions) outweigh the operational and cost headwinds.Positive Updates
Revenue Growth in H1
Group sales increased 3.6% year-on-year to GBP 926m for the half, driven by a strong Q1 (+6.2%) and a softer Q2 (+1.6%).
Negative Updates
Softer Q2 Trading and Consumer Confidence
Q2 growth was softer at 1.6%; management cited subdued consumer confidence and a more aggressive, longer-lasting external discounting environment that reduced participation.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth in H1
Group sales increased 3.6% year-on-year to GBP 926m for the half, driven by a strong Q1 (+6.2%) and a softer Q2 (+1.6%).
Read all positive updates
Company Guidance
Management reaffirmed full-year profit before tax guidance "in line with consensus" after reporting H1 sales of £926m (up 3.6% YoY; Q1 +6.2%, Q2 +1.6%) and H1 PBT of £114m (down £9m), with gross margin up 60bps to 53.4% and market share at 7.9% (+0.2pp); they flagged digital participation at 41% (+2pp), CSAT +2.6pp, H1 free cash flow £171.4m (65% conversion) and a headline net cash position of £13m (underlying net debt ~£80m after a £93m payables timing variance). Cost guidance expects H2 moderation after H1 net operating costs of £375m (+£32m) driven by volume-related costs £11m, inflation ~£11m, investment £9m, partly offset by £6m productivity and £7m other items, with wage pressure expected to peak in H1 and a lower NLW rise in April 2026 easing Q4. Capital allocation: interim ordinary dividend 17p (+3%) plus a special dividend 25p, buyback up to 1.6m shares, and reduced FY CapEx guidance to ~£40m (H1 CapEx £23.2m); the Board expects broadly neutral working capital at year end and ongoing FX tailwinds to help margins.Dunelm Group Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
60
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.80B | 1.77B | 1.71B | 1.64B | 1.58B | 1.34B |
| Gross Profit | 908.30M | 928.30M | 883.30M | 820.90M | 809.40M | 688.90M |
| EBITDA | 264.03M | 251.20M | 239.70M | 224.10M | 297.60M | 241.40M |
| Net Income | 148.98M | 156.30M | 151.20M | 151.90M | 171.20M | 128.90M |
Balance Sheet | ||||||
| Total Assets | 779.20M | 741.50M | 682.00M | 696.80M | 737.90M | 766.70M |
| Cash, Cash Equivalents and Short-Term Investments | 46.30M | 30.00M | 23.40M | 46.30M | 30.20M | 128.60M |
| Total Debt | 287.60M | 377.70M | 326.60M | 334.10M | 330.90M | 293.30M |
| Total Liabilities | 615.60M | 622.70M | 544.10M | 559.30M | 559.60M | 485.50M |
| Stockholders Equity | 163.60M | 118.80M | 137.90M | 137.50M | 178.30M | 281.20M |
Cash Flow | ||||||
| Free Cash Flow | 201.52M | 220.70M | 199.90M | 218.80M | 227.80M | 168.50M |
| Operating Cash Flow | 240.51M | 255.90M | 232.30M | 240.60M | 251.80M | 184.20M |
| Investing Cash Flow | -50.56M | -65.90M | -38.30M | -20.70M | -41.60M | -15.60M |
| Financing Cash Flow | -200.76M | -183.00M | -217.30M | -204.40M | -309.70M | -127.60M |
Dunelm Group Technical Analysis
Neutral
14.55
Price Trends
11.76
Negative
12.87
Negative
13.71
Negative
Market Momentum
-0.33
Negative
52.95
Neutral
90.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNLMY, the sentiment is Neutral. The current price of 14.55 is above the 20-day moving average (MA) of 10.89, above the 50-day MA of 11.76, and above the 200-day MA of 13.71, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 52.95 is Neutral, neither overbought nor oversold. The STOCH value of 90.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DNLMY.
Dunelm Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $22.77B | 23.88 | 51.45% | 1.37% | 5.10% | 7.59% | |
67 Neutral | $3.58B | 9.73 | 18.07% | 1.04% | -0.65% | -10.35% | |
63 Neutral | $2.28B | 6.65 | 105.88% | 6.40% | 6.66% | 6.21% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $3.70B | 7.11 | -44.22% | 4.16% | -1.04% | -20.88% | |
49 Neutral | $2.33B | 29.88 | -569.01% | ― | 9.74% | 55.13% | |
47 Neutral | $219.11M | 0.88 | -67.22% | ― | -8.07% | -2206.16% |
* Consumer Cyclical Sector Average
DNLMY
Dunelm Group
11.32
0.02
0.20%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.