Dunelm Group PLC (LON:DNLM) maintained its full-year profit outlook despite a softer second quarter, reporting first-half profit before tax of £114 million, down 7.5% year-over-year but at the top end of guidance. Revenue rose 3.6% to £926.3 million, with digital sales now accounting for 41% of total sales. The UK homewares retailer's market share increased by 20 basis points to 7.9%, demonstrating continued growth in a "subdued" market environment.

The company's gross margin improved by 60 basis points to 53.4%, primarily driven by favorable foreign exchange rates. Dunelm also announced a special dividend of 25 pence per share, higher than analysts had forecast, and increased its interim ordinary dividend by 3% to 17 pence per share. CEO Clo Moriarty, who joined in October 2025, noted the company saw stronger sales growth in early Q3 following a good Winter Sale.

Shares rose following the results announcement as investors welcomed the maintained full-year profit guidance. Dunelm expects profit before tax for the full year to be in line with current consensus expectations of £214 million. The company plans to fully launch its app this spring and has recovery plans in place to address furniture availability issues that contributed to the Q2 slowdown.