Dunelm stock reports 3.1 percent sales growth as cash flow jumps

Published on 09/25/2026 at 14:06 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Dunelm stock generated GBP 154.8 million in free cash flow for FY26, up 21.5 percent on September 8, 2026. Deutsche Bank set a GBp 1,000 target.

Schwarzweiß-Reportagefoto einer Lagerhalle mit Arbeitern und Textilstapeln — Dunelm Group plc GB0033745292 dokumentiert schwarzweiß Arbeiter in einer großen Textilien-Lagerhalle beim Sortieren, Illustration mit AI erstellt.

Dunelm Group (ISIN GB0033745292) reported FY26 sales of GBP 1.8255 billion, up 3.1 percent from GBP 1.7710 billion, while its stock opened at GBp 784.50 on the LSE on September 25, 2026. The figures put cash generation against a flatter profit picture and a lower broker target.

Sales grow as cash strengthens

According to Dunelm, FY26 total sales reached GBP 1.825 billion, compared with GBP 1.771 billion in FY25. Profit before tax remained GBP 211 million, leaving the company with revenue growth but no year-over-year expansion in that profit measure.

Investing.com reported on September 8, 2026, that free cash flow rose 21.5 percent to GBP 154.8 million from GBP 127.4 million. Gross margin also expanded 10 basis points to 52.5 percent, while the 11.6 percent profit-before-tax margin was below 11.9 percent in FY25.

Strategy demands investment

Dunelm's three-year Winning Hearts & Homes plan includes cost reductions and additional investment. Yahoo Finance reported on September 23, 2026, that the retailer plans to remove GBP 100 million of unproductive costs from its FY26 base by FY29.

The plan also targets an adjusted profit-before-tax margin of 11 percent and return on capital employed of 30 percent, according to Yahoo Finance. Management expects GBP 30 million to GBP 40 million of non-recurring costs over the next two years, making execution and cost productivity central to the plan.

Broker target stays above the stock

MarketBeat reported on September 9, 2026, that Deutsche Bank reduced its Dunelm target from GBp 1,050 to GBp 1,000 while retaining a Buy rating. The same report said JPMorgan cut its target from GBp 1,225 to GBp 1,050 and kept an Overweight rating.

The target revisions underline the tension in the FY26 numbers: sales and cash flow improved, but profit before tax stayed flat and the strategy carries near-term investment costs. The opening price of GBp 784.50 was 33.2 percent below Deutsche Bank's GBp 1,000 target, calculated against the target rather than presented as a forecast.

Stock sits above yearly low

Dunelm opened at GBp 784.50 on the LSE on September 25, 2026. The same session reference showed a 52-week range of GBp 707 to GBp 1,174, placing the opening price 10.96 percent above the yearly low.