Dunelm Group (LON:DNLM) Posts Earnings Results

Dunelm Group (LON:DNLM) released its quarterly earnings results on Tuesday. The company reported GBX 42 earnings per share for the quarter, Digital Look Earnings reports. Dunelm Group had a net margin of 8.86% and a return on equity of 96.64%.

Here are the key takeaways from Dunelm Group’s conference call:

• Strong H1 cash and margin performance—sales up 3.6%, gross margin improved 60bps to 53.4%, headline free cash flow of £171m, and the board declared an interim dividend (17p) plus a special dividend (25p) and a small buyback, supporting shareholder returns.
• Operating costs pressured H1 profit—net operating costs rose £32m to £375m (volume, wage inflation and phasing of investments), which drove PBT to £114m (down £9m); management says costs should moderate in H2 but cost dynamics remain a near-term risk.
• Strategic customer push—new Chief Customer Officer appointed, app officially launching this month with high early engagement, and a targeted plan to improve personalization and lift share of wallet (current loyal customers represent two?thirds of sales but only ~15% of their homewares spend).
• Operational issues identified and being fixed—furniture availability shortfall traced to forecasting inputs has been corrected (availability now >95%), and a packaging change cut one-person delivery complaints by ~20%, boosting CSAT and reducing cost of damages.
• Estate and capex stance—CapEx guidance reduced to ~£40m (from ~£50m) with slower store openings this year but a stronger FY27 pipeline and a continued target of ~5–10 openings annually as the group reappraises formats to expand reach.

Dunelm Group Price Performance

Dunelm Group stock opened at GBX 936.50 on Tuesday. The business’s 50 day simple moving average is GBX 1,058.25 and its 200 day simple moving average is GBX 1,113.67. Dunelm Group has a 12 month low of GBX 836.61 and a 12 month high of GBX 1,249. The company has a market cap of £1.90 billion, a price-to-earnings ratio of 12.19, a PEG ratio of -10.32 and a beta of 1.18. The company has a current ratio of 1.04, a quick ratio of 0.16 and a debt-to-equity ratio of 236.84.

Wall Street Analyst Weigh In

Several equities analysts have commented on DNLM shares. Panmure Gordon dropped their target price on shares of Dunelm Group from GBX 995 to GBX 830 and set a “sell” rating on the stock in a research report on Monday, January 19th. Jefferies Financial Group raised Dunelm Group to a “buy” rating and set a GBX 1,075 price target for the company in a research report on Monday. Deutsche Bank Aktiengesellschaft cut their price objective on Dunelm Group from GBX 1,360 to GBX 1,200 and set a “buy” rating on the stock in a research report on Friday, January 16th. Shore Capital Group reduced their price objective on Dunelm Group from GBX 1,300 to GBX 1,200 and set a “buy” rating for the company in a research note on Tuesday, January 27th. Finally, JPMorgan Chase & Co. raised their target price on Dunelm Group from GBX 1,140 to GBX 1,240 and gave the company a “neutral” rating in a research report on Tuesday, October 28th. Seven analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, Dunelm Group has an average rating of “Moderate Buy” and a consensus price target of GBX 1,216.67.

Insider Transactions at Dunelm Group

In other news, insider Karen Witts bought 10,790 shares of the stock in a transaction on Monday, December 1st. The shares were purchased at an average cost of GBX 1,104 per share, for a total transaction of £119,121.60. 34.15% of the stock is owned by corporate insiders.

About Dunelm Group

Dunelm is the UK’s market leader in homewares with a purpose ‘to help create the joy of truly feeling at home, now and for generations to come’. Its specialist customer proposition offers value, quality, choice and style across an extensive range of c.70,000 products, spanning multiple homewares and furniture categories and including services such as Made to Measure window treatments.

The business was founded in 1979 by the Adderley family, beginning as a curtains stall on Leicester market before expanding its store footprint.