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Dunelm Group
(LSE:DNLM)
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Rating:65Neutral
Price Target:
874.00 p
▲(6.13% Upside)
Action:Downgraded
Date: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
Private‑label margin strength
A high share of own‑brand product (around 70%) and clearer good/better/best range positioning gives Dunelm durable margin control. Private‑label sourcing increases pricing flexibility and gross margin resilience versus third‑party assortments, supporting long‑term profitability even if volumes fluctuate.
Negative Factors
High financial leverage
A debt‑to‑equity ratio near 3.2 signals meaningful leverage that can constrain strategic flexibility. Elevated leverage increases interest and refinancing risk, reduces shock absorption for cost inflation or sales weakness, and limits capacity for opportunistic investment or acquisitions over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Private‑label margin strength
A high share of own‑brand product (around 70%) and clearer good/better/best range positioning gives Dunelm durable margin control. Private‑label sourcing increases pricing flexibility and gross margin resilience versus third‑party assortments, supporting long‑term profitability even if volumes fluctuate.
Read all positive factors
Dunelm Group (DNLM) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£1.64B
Dividend Yield3.99%
Average Volume (3M)346.18K
Price to Earnings (P/E)11.0
Beta (1Y)1.12
Revenue Growth4.39%
EPS Growth-1.37%
CountryUK
Employees12,000
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.74
Shares Outstanding201,455,430
10 Day Avg. Volume246,141
30 Day Avg. Volume346,178
Financial Highlights & Ratios
PEG Ratio5.77
Price to Book (P/B)20.30
Price to Sales (P/S)1.36
P/FCF Ratio10.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£1,127.17Price Target Upside36.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)0.76
Revenue Forecast (FY)£1.82B
Dunelm Group Business Overview & Revenue Model
Company Description
Dunelm Group plc is a leading retailer specializing in home furnishings and decorative items across the United Kingdom. The company provides a comprehensive range of products for every room, including furniture for bedrooms, living areas, dining s...
How the Company Makes Money
Dunelm makes money primarily by retailing homewares and furniture to consumers. Its main revenue stream is the sale of own-brand and third-party products through a multichannel model: (1) physical retail stores, where customers purchase items dire...
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 balanced clear operational and financial progress with near-term headwinds. Highlights include steady H1 sales growth (3.6%), a 60bp gross margin improvement to 53.4%, stronger cash generation (GBP 171m FCF), increased market share (7.9%), higher CSAT (+2.6ppt) and digital engagement (41% participation), plus decisive strategic actions (new CCO hire, app launch, range and store initiatives). Lowlights were an H1 PBT decline to GBP 114m (down GBP 9m), higher operating costs (+GBP 32m YoY), softer Q2 trading, a furniture forecasting availability lapse and a temporary working capital timing benefit of GBP 93m. Management communicated clear remediation steps, productivity levers and confidence in delivering full-year PBT in line with consensus while moderating CapEx, which supports a constructive near-to-medium term outlook.Positive Updates
Half-Year Sales Growth
Group sales grew 3.6% year-on-year to GBP 926m in H1, with Q1 up 6.2% and Q2 up 1.6%.
Negative Updates
Profit and EPS Decline
Profit before tax was GBP 114m, down GBP 9m year-on-year; diluted EPS fell from 45p to 41.7p.
Read all updates
Q2-2026 Updates
Positive
Negative
Half-Year Sales Growth
Group sales grew 3.6% year-on-year to GBP 926m in H1, with Q1 up 6.2% and Q2 up 1.6%.
Read all positive updates
Company Guidance
Guidance: management expects full‑year profit before tax in line with market consensus, an effective tax rate about 50–100bps above the headline corporation tax rate, and a reduced FY26 CapEx target of ~£40m (down from ~£50m), with broadly neutral working capital at year end; they expect H2 operating‑cost inflation to moderate materially as productivity accelerates (including self‑serve checkouts in >100 stores by year‑end), a continuing foreign‑exchange tailwind into the remainder of the year, and confidence in delivering consensus PBT despite Q2 softness. Key H1 metrics referenced alongside this guidance include sales +3.6% to £926m (Q1 +6.2%, Q2 +1.6%), gross margin 53.4% (+60bps), PBT £114m (‑£9m YoY), EPS 41.7p (from 45p), headline free cash flow £171.4m, headline net cash £13m (underlying net debt ~£80m after a £93m payables timing variance), cash conversion 65%, digital participation 41% (+2pp), H1 net operating costs £375m (+£32m), interim dividend 17p (+3%) and a special dividend of 25p (plus a buyback programme of up to 1.6m shares).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 | 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
Positive
823.50
Price Trends
775.71
Positive
823.50
Negative
929.11
Negative
Market Momentum
9.03
Negative
59.70
Neutral
72.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DNLM, the sentiment is Positive. The current price of 823.5 is above the 20-day moving average (MA) of 785.25, above the 50-day MA of 775.71, and below the 200-day MA of 929.11, indicating a neutral trend. The MACD of 9.03 indicates Negative momentum. The RSI at 59.70 is Neutral, neither overbought nor oversold. The STOCH value of 72.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:DNLM.
Dunelm Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | £3.14B | 6.75 | 21.64% | ― | -6.43% | 52.93% | |
73 Outperform | £1.66B | 12.77 | 5.88% | 1.18% | 9.51% | -31.96% | |
70 Outperform | £500.04M | 14.11 | 21.65% | ― | 11.35% | 247.54% | |
65 Neutral | £1.64B | 10.99 | 105.88% | 3.99% | 4.39% | -1.37% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | £49.14M | 31.32 | 15.03% | ― | 23.02% | 57.61% | |
45 Neutral | £47.75M | -113.75 | -10.09% | 2.09% | -7.46% | 71.01% |
* Consumer Cyclical Sector Average
GB:DNLM
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Dunelm Group Corporate Events
Executive/Board Changes
Dunelm Grants CEO Clodagh Moriarty Buy-Out Share Award
Positive
Jun 11, 2026
Dunelm Group has granted Chief Executive Officer Clodagh (Clo) Moriarty a buy-out award under its 2014 Long Term Incentive Plan, structured as nil-cost options over 33,966 ordinary shares. The award compensates her for a forfeited 2026 bonus share...
Regulatory Filings and Compliance
Dunelm Updates Market on Total Voting Share Capital
Neutral
Jun 1, 2026
Dunelm Group has confirmed that, as of 29 May 2026, its issued share capital consists of 203,426,835 ordinary shares of 1p each, of which 1,971,408 are held in treasury and do not carry voting rights. This leaves 201,455,427 ordinary shares in iss...
Other
Dunelm Non-Executive Director Increases Stake with Share Purchase
Positive
May 12, 2026
Dunelm Group plc disclosed that non-executive director Ajay Kavan purchased 3,947 ordinary shares in the company at a price of £7.5589 per share on 11 May 2026. Following this transaction on the London Stock Exchange, Kavan’s beneficial...
Regulatory Filings and Compliance
Dunelm Corrects Director Deal Disclosure as Chair Increases Shareholding
Neutral
May 8, 2026
Dunelm Group has issued a correction to a previous regulatory disclosure, clarifying that the price per share for a reported director share purchase should be 763.7 pence rather than 7,637 pence, with all other details unchanged. The correction un...
Regulatory Filings and Compliance
Dunelm Chair Alison Brittain Increases Stake with Share Purchase
Positive
May 8, 2026
Dunelm Group plc disclosed that its chair, Alison Brittain, purchased 12,500 ordinary shares in the company on 7 May 2026 at a price of £7.637 per share. Following this transaction, Brittain’s beneficial holding in Dunelm increased to 5...
Regulatory Filings and Compliance
Dunelm Updates Share Capital and Voting Rights Figure
Neutral
May 1, 2026
Dunelm Group has confirmed that as of 30 April 2026 its issued share capital consists of 203,426,835 ordinary shares, of which 2,006,727 are held in treasury without voting rights. This leaves 201,420,108 ordinary shares carrying voting rights, a ...
Business Operations and StrategyFinancial Disclosures
Dunelm Grows Sales and Margins but Flags Profit at Lower End of Forecasts
Negative
Apr 16, 2026
Dunelm reported third-quarter sales of £472m, up 2.1% year on year, with digital channels rising to 43% of revenue and helping to lift year-to-date sales 3.1% to £1,398m. Gross margin improved by 30 basis points as the retailer balanced ...
Regulatory Filings and Compliance
Dunelm Updates Market on Total Voting Rights and Share Capital
Neutral
Apr 1, 2026
Dunelm Group has confirmed that its issued ordinary share capital stands at 203,426,835 shares, of which 2,113,796 are held in treasury, leaving 201,313,039 ordinary shares carrying voting rights. This updated share count provides the key denomina...
Executive/Board ChangesRegulatory Filings and Compliance
Dunelm CEO Boosts Equity Stake Through Nil-Cost Option Exercise
Neutral
Mar 31, 2026
Dunelm Group has disclosed that Chief Executive Officer Clodagh (Clo) Moriarty exercised 56,478 nil-cost share options granted under the company’s 2014 Long Term Incentive Plan, which were awarded as a buy-out to compensate her for forfeited...
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.