Dunelm Group (DNLM) AI Stock Analysis

• Market Cap: £1.91B
• Dividend Yield: 3.99%
• Average Volume (3M): 346.18K
• Price to Earnings (P/E): 6.7
• Beta (1Y): 0.99
• Revenue Growth: 3.78%
• EPS Growth: 3.29%
• Country: UK
• Employees: 12,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.42
• Shares Outstanding: 201,630,460
• 10 Day Avg. Volume: 246,141
• 30 Day Avg. Volume: 346,178
• PEG Ratio: 5.79
• Price to Book (P/B): 20.30
• Price to Sales (P/S): 1.36
• P/FCF Ratio: 10.93
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £1,199.50
• Price Target Upside: 27.67% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.78
• Revenue Forecast (FY): £1.83B

• Rating: 65 Neutral
• Price Target: 1,007.00p ▲(7.18% Upside)
• Action: Downgraded Date: 02/10/26
• Date: Action: Downgraded 02/10/26

The score is driven primarily by solid underlying financial performance and a constructive earnings outlook (consensus-aligned PBT guidance and lower CapEx) alongside attractive valuation (low P/E and high yield). These positives are offset by weak technical momentum (price below key moving averages, negative MACD) and financial risk flags from leverage and declining free cash flow growth.

Positive Factors

High Gross Margin

Sustained gross margins above 50% reflect durable category economics, strong sourcing and pricing discipline. High margin cushions operating cost pressure, supports funded investment in omnichannel and dividends, and gives flexibility to maintain profitability across a normal retail cycle.

Strong Cash Generation

Robust operating cash flow and high cash conversion provide lasting financial flexibility to fund dividends, special payouts and buybacks while supporting modest CapEx. Reliable cash generation underpins balance sheet repair and strategic reinvestment over the medium term.

Omnichannel & Product Strength

Rising digital engagement, improved customer satisfaction and a large owned-brand assortment increase customer loyalty, margins and cross-sell potential. These structural omnichannel and range advantages support durable market share gains and higher average transaction values.

Negative Factors

High Leverage

Material leverage constrains financial flexibility and raises sensitivity to interest rate moves and trading volatility. High debt-to-equity can limit capacity for growth investments or aggressive buybacks and increases refinancing and covenant risk over the medium term.

Free Cash Flow Timing Risk

Part of reported FCF was driven by a one-off payables timing effect, masking weaker underlying FCF growth. If underlying cash conversion weakens, the company’s ability to sustain dividends, specials and deleveraging could be impaired across the next several quarters.

Rising Operating Costs

Persistent labour, distribution and marketing cost inflation compresses operating leverage and margins unless offset by productivity. If cost inflation proves stickier than management expects, margin recovery and earnings resilience over the medium term could be limited.

Dunelm Group Business Overview & Revenue Model

Company Description

Dunelm Group plc retails homewares in the United Kingdom. The company offers furniture for bedroom, living room, dining room, and office; sofas and chairs; bean bags; bed frames, mattresses, storage beds, divan bases, and headboards, as well as kids beds; and bedding products, such as bed linens, duvets, pillows, mattress toppers, protectors, and baby and kids beddings. It also provides curtains, and poles and tracks; blinds; rugs, runners, and door mats; mirrors, pictures and frames, clocks, wallpapers and DIY, cushions and throws, and accessories; lighting products, including ceiling and wall lights, lamp shades, floor and table lamps, and outdoor lights; kitchen products, such as cooking, dining, utility, and electrical products; and storage products for home, clothes, and kitchen, as well as travel and luggage products. In addition, the company offers garden furniture and storage, garden decoration, and entertaining and dining products; and towels and bathmats, bathroom furniture, bathroom décor, and bathroom accessories, as well as trees and decoration, gifts, cook and dine, and trends Christmas products. It operates 175 superstores and 1 distribution centers, as well as sells its products through an online store at dunelm.com. Dunelm Group plc was founded in 1979 and is headquartered in Syston, the United Kingdom.

How the Company Makes Money

Dunelm generates revenue primarily through the sale of homeware and furniture products. Its revenue model includes direct sales from its extensive network of retail stores as well as online sales through its e-commerce platform. Key revenue streams include sales of textiles, furniture, and home décor items. Additionally, Dunelm benefits from a strong private label presence, which enhances margins. The company has also invested in improving its digital capabilities and customer experience, driving growth in online sales. Significant partnerships with suppliers and manufacturers enable Dunelm to offer a diverse product range while optimizing costs. Seasonal promotions and loyalty programs further contribute to customer retention and increased sales.

Dunelm Group Financial Statement Overview

Summary

Solid operating profile with strong gross margin (52.42%) and consistent revenue growth, supported by robust operating cash flow. Offsetting this are high leverage (debt-to-equity 3.18) and declining free cash flow growth, which increase financial risk.

Income Statement

Dunelm Group has shown consistent revenue growth over the years, with a recent growth rate of 2.51%. The gross profit margin is strong at 52.42%, indicating efficient cost management. However, the net profit margin is relatively modest at 8.83%, suggesting room for improvement in profitability. EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio of 3.18, indicating significant leverage, which could pose financial risks. However, the equity ratio is reasonable, and the return on equity is strong, suggesting effective use of equity to generate profits.

Cash Flow

Operating cash flow is robust, covering net income well, with a ratio of 0.89. Free cash flow has declined recently, but it remains a significant portion of net income, indicating good cash generation capabilities. The negative growth in free cash flow is a concern that needs addressing.

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	911.10M	928.30M	883.30M	741.80M	730.30M	611.40M
EBITDA	265.00M	251.20M	295.90M	278.20M	297.10M	241.60M
Net Income	149.50M	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	202.80M	220.70M	199.90M	217.70M	225.70M	167.80M
Operating Cash Flow	241.90M	255.90M	232.30M	239.50M	249.70M	183.50M
Investing Cash Flow	-51.50M	-65.90M	-38.30M	-21.80M	-41.70M	-15.70M
Financing Cash Flow	-199.50M	-183.00M	-217.30M	-202.20M	-307.50M	-126.80M

Dunelm Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 939.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DNLM, the sentiment is Negative. The current price of 939.5 is below the 20-day moving average (MA) of 967.60, below the 50-day MA of 1010.94, and below the 200-day MA of 1098.51, indicating a bearish trend. The MACD of -6.03 indicates Negative momentum. The RSI at 37.78 is Neutral, neither overbought nor oversold. The STOCH value of 16.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:DNLM.

Dunelm Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRAS	73 Outperform	£2.87B	2.38	19.54%	―	-6.43%	52.93%
CURY	73 Outperform	£1.58B	23.58	6.16%	1.18%	9.51%	-31.96%
PROC	66 Neutral	£31.71M	-3.95	18.64%	―	16.66%	147.92%
DNLM	65 Neutral	£1.91B	6.72	121.78%	3.99%	3.78%	3.29%
AO	63 Neutral	£527.53M	11.70	7.52%	―	13.21%	-54.35%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MRK	53 Neutral	£49.33M	-28.65	-9.68%	2.09%	-5.97%	14.75%

Dunelm Group Corporate Events

Dunelm lifts sales and margins as it grows digital share despite Q2 slowdown

Dunelm Group reported a solid first-half performance for the 26 weeks to 27 December 2025, with total sales up 3.6% to £926.3m and digital sales rising to 41% of revenue, helping it gain 20 basis points of market share in the UK homewares and furniture market to 7.9%. Gross margin improved to 53.4%, supported by foreign exchange gains while retail prices were broadly stable, and the board maintained its shareholder-friendly stance with a 3% uplift in the interim ordinary dividend and a special payout, despite lower profit before tax of £114m and higher cost ratios.

Management flagged a challenging consumer backdrop and softer second-quarter trading but noted stronger sales momentum in early third quarter trading following a successful Winter Sale and positive reaction to new spring ranges. New chief executive Clo Moriarty said the business retains significant headroom for growth as it rolls out a full shopping app and works to restore furniture availability, and the group guided that full-year profit before tax should be in line with current market expectations, signalling operational resilience and continued confidence in its strategy.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1054.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Confirms Total Voting Rights and Share Capital Structure

Dunelm Group plc has confirmed that its issued ordinary share capital totals 203,426,835 shares with a nominal value of 1p each, of which 791,338 shares are held in treasury, leaving 202,635,497 ordinary shares carrying voting rights. The company noted that this voting share figure should be used by shareholders as the denominator for calculating whether they must disclose new or changed holdings under regulatory transparency rules, clarifying the current capital and voting structure for investors and the market.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1040.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Delivers Solid First Half but Tempers Profit Outlook Amid Tough UK Retail Climate

Dunelm Group reported a solid first half in a difficult UK retail environment, with total sales rising 3.6% year-on-year to £926m and digital sales increasing to 41% of the mix. While strong trading in the first quarter was followed by a softer second quarter—particularly around Black Friday and into December amid intense discounting and marketing competition—core categories such as bedding, towels, lighting and Made-to-Measure performed well, offsetting weaker furniture sales linked to availability issues. Gross margin improved by 60 basis points, helped mainly by foreign exchange tailwinds, and first-half profit before tax is expected at £112m–£114m, with full-year profit now guided to the lower end of market expectations. Management is pushing ahead with strategic initiatives to reinforce Dunelm’s market position, including new and reopened stores, the rollout of a new mobile app and targeted actions to improve product availability, as it seeks to capitalise on opportunities to extend its leadership in homewares despite ongoing macroeconomic pressures.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1266.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Delivers Solid First Half but Warns on Full-Year Profit Amid Tough Trading

Dunelm reported a solid first-half performance in a tough UK retail environment, with total sales up 3.6% year-on-year to £926m and digital sales rising to 41% of the total, while gross margin improved by 60 basis points, helped by foreign exchange tailwinds. However, trading in the second quarter slowed, particularly around Black Friday and into December amid heightened competitive discounting and softer furniture sales, leading the group to flag that full-year pre-tax profit is now expected at the lower end of market expectations, even as it continues to invest in new stores, a refreshed app and availability improvements to reinforce its market-leading position.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1266.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Updates Market on Total Voting Rights and Share Capital

Dunelm Group plc has notified the market that its issued ordinary share capital totals 203,426,835 shares of 1p each, of which 1,747,412 are held in treasury, leaving 201,679,423 ordinary shares carrying voting rights. This updated share count provides the official denominator for investors assessing whether they must disclose holdings or changes in their positions under UK Disclosure and Transparency Rules, ensuring clarity for shareholders and regulators on Dunelm’s current voting capital base.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1266.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Group Announces Executive Share Transactions

Dunelm Group plc announced transactions involving James Cooper, a person discharging managerial responsibilities, who exercised nil-cost options under the Long-Term Incentive Plan and sold shares to cover tax liabilities. The transactions involved the exercise of 5,773 options and the sale of 2,722 shares at £11.15 each, with the sales conducted on the London Stock Exchange. This announcement highlights the company’s ongoing management of executive compensation and its implications for shareholder value.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1266.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm CFO Invests Bonus in Company Shares

Dunelm Group plc announced that its Chief Financial Officer, Karen Witts, purchased 10,790 ordinary shares at £11.039 per share. This transaction fulfills her obligation to invest two-thirds of her FY25 cash bonus in company shares, as per the company’s remuneration policy. This move reflects the company’s commitment to aligning management incentives with shareholder interests, potentially strengthening stakeholder confidence.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1300.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Group Updates Share Capital and Voting Rights

Dunelm Group plc has announced that its issued ordinary share capital consists of 203,426,835 shares, with 1,843,320 held in treasury, resulting in 201,583,515 shares with voting rights. This update is crucial for shareholders to determine their notification requirements regarding their interest in the company’s share capital, in compliance with the Disclosure and Transparency Rules.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1300.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Group Announces Sharesave Scheme Participation and Director Share Purchase

Dunelm Group plc announced the grant of options under its 2025 all-employee Sharesave scheme, with key managerial personnel participating at an option price of £9.27 per share. Additionally, Non-Executive Director Ajay Kavan purchased 3,220 ordinary shares, enhancing his beneficial holding to 10,762 shares. These transactions reflect the company’s ongoing commitment to employee investment and shareholder engagement, potentially strengthening its market position and aligning managerial interests with those of stakeholders.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1300.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Group Announces Sharesave Options and Director Share Purchase

Dunelm Group plc has announced the granting of options under its 2025 Sharesave scheme, offering shares at £9.27 each to key managerial personnel including the Chief Executive and Chief Financial Officer. Additionally, Non-Executive Director Ajay Kavan has purchased 3,220 ordinary shares at a price of 1067.5p per share, increasing his beneficial holding to 10,762 shares. These transactions reflect the company’s ongoing efforts to align management interests with shareholder value and may impact stakeholder perceptions positively.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1300.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Group AGM Resolutions Passed with Strong Shareholder Support

Dunelm Group plc announced the results of its Annual General Meeting held on November 19, 2025, where all proposed resolutions were successfully passed by the shareholders. The approval of these resolutions, including those related to accounts, dividends, and board appointments, underscores strong shareholder support and is expected to positively impact the company’s governance and operational strategies.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1300.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.

Dunelm Group Announces Managerial Share Transactions

Dunelm Group announced a transaction involving Luisa Wright, a person discharging managerial responsibility, who exercised nil-cost options under the Long-Term Incentive Plan and sold shares to cover tax liabilities. The transaction involved the exercise of 4,787 options and the sale of 2,257 shares at £11.21 each, impacting the company’s share capital and potentially influencing investor perceptions.

The most recent analyst rating on (GB:DNLM) stock is a Buy with a £1300.00 price target. To see the full list of analyst forecasts on Dunelm Group stock, see the GB:DNLM Stock Forecast page.