Homeware chain Dunelm Group has delivered a strong start to its new financial year, posting solid first-quarter sales growth and improved margins as the UK’s leading homewares retailer continues to invest in its digital and brand strategy.

For the 13 weeks to 27 September 2025, total sales rose 6.2% year-on-year to £428 million, driven by higher volumes and an increase in average item values.

Digital participation grew to 40% of total sales, up three percentage points from last year, reflecting the retailer’s continued strength in online and cross-channel shopping.

Gross margin improved by 80 basis points, supported by favourable foreign exchange movements and what the company described as “continued operational grip”.

Dunelm said it remains on track to meet full-year expectations, with profits expected to be weighted more towards the second half due to the timing of investments and ongoing inflationary pressures.

The business credited its broad and relevant product mix for the strong performance.

It also reported healthy demand across all categories, with warming textiles such as rugs and throws performing particularly well as customers prepared their homes for autumn and winter. Its range, marketed under the “Home of Homes” proposition, continues to resonate across a wide customer base.

The retailer also reported success from its largest-ever student campaign, which helped drive around 40% year-on-year growth in that segment, broadening appeal among younger shoppers.

CEO Clo Moriarty, who joined the business on 1 October, praised the company’s inclusive culture and strong performance.

“The business has delivered another strong performance in the first quarter, reflecting both the appeal of our customer offer and the strength of our business model,” she said.

Dunelm launched its new mobile app during the quarter. It marks the start of a new phase in the company’s multichannel development, with plans to expand its functionality over the next year to deliver more “inspirational and cross-channel” shopping experiences.

Looking ahead, Dunelm said it remains confident in its ability to deliver sustainable, profitable growth, as it works towards achieving 10% market share in the medium term.

The retailer will report its second-quarter trading update on 15 January 2026.

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