Dunelm Group (DNLMY) AI Stock Analysis

Dunelm Group

(Other OTC:DNLMY)

Select Model

Rating:71Outperform

Price Target:$13.00▲(11.92% Upside)

Action:reiterated

Date:09/11/26

The overall score reflects a well-run, cash-generative retailer with an attractive valuation and strong dividend profile, supported by consistent sales growth, market share gains, and improving gross margins. These strengths are tempered by an only adequate balance sheet with elevated leverage, flat profit and EPS, ongoing cost and inflation pressures, operational issues in home delivery and digital execution, and a currently weak share price trend trading below key moving averages, even though technicals suggest the stock is oversold and could recover.

Positive Factors

Sales growth and market shareDunelm is growing revenue while taking share in a large UK homewares market, indicating durable customer relevance and competitive execution. Continued share gains can support scale benefits, strengthen supplier and brand economics, and provide a foundation for sustained expansion.

Negative Factors

Margin pressure from rising costsPersistent wage, fuel, warehouse, and volume-related cost inflation can absorb the benefit of sales growth and limit operating leverage. If Dunelm cannot offset these pressures through productivity, pricing, or mix, earnings growth and reinvestment capacity may remain constrained.

Dunelm Group (DNLMY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $2.52B
Dividend Yield: 7.43%
Average Volume (3M): 2,506
Price to Earnings (P/E): 11.3
Beta (1Y): 0.62
Revenue Growth: 6.93%
EPS Growth: 3.60%
Country: US
Employees: 12,000
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Specialty Retail

Dunelm Group Business Overview & Revenue Model

Company Description

Dunelm Group plc operates as a leading retailer of homewares across the United Kingdom. Its extensive product portfolio caters to nearly every aspect of home living. The company offers a broad selection of furniture and beds, encompassing items for t...

Dunelm Group Earnings Call Summary

Earnings Call Date:Sep 07, 2026(Q4-2026)|% Change Since:0.07%|Next Earnings Date:Feb 09, 2027

Earnings Call SentimentPositive

The call was predominantly positive: Dunelm delivered sales growth, market share gains, gross margin expansion, strong cash generation, digital growth, improved customer satisfaction, and higher dividends despite a challenging macroeconomic backdrop. The main negatives were flat profit and earnings, inflationary and operating cost pressures, weaker third-party home delivery, fewer store openings than desired, execution gaps in some digital and social channels, and a mixed Q1 start.

Positive Updates

Sales Growth and Market Share Gains

FY 2026 total sales increased 3.1% to GBP 1,825 million. Dunelm gained 10 basis points of market share year on year, reaching 7.9% of the GBP 25 billion U.K. homewares and furniture market.

Negative Updates

Flat Profit and Earnings

Profit before tax was GBP 211 million, flat year on year, despite sales growth. PBT margin decreased by 30 basis points to 11.6%, while diluted earnings per share was 76.8 pence, also flat year on year.

Company Guidance

The company said its net debt to EBITDA ratio was 0.3 times, within its targeted range of 0.2 to 0.6 times; Capital expenditure of GBP 43 million was in line with guidance; business rates would provide an annualized tailwind into next year; Made to Measure’s technology investment would support MTM's double-digit growth moving forward; operational and technology-led changes were in the plan to support improvement in home delivery; and planned scarcity will continue to be a key factor.

Dunelm Group Financial Statement Overview

Summary

Financial performance is solid overall: revenue has grown consistently, profitability is healthy, and cash generation is a clear strength with closely tracking operating cash flow and robust, recovering free cash flow. However, debt is high relative to shareholders’ capital, equity has declined versus assets, and recent margin pressure has left profits broadly flat, so the balance sheet is adequate rather than conservative.

Income Statement

74Positive

Balance Sheet

53Neutral

Cash Flow

81Very Positive

Financial statement breakdown
Breakdown	TTM	Jun 2026	Jun 2025	Jun 2024	Jun 2023	Jun 2022
Income Statement
Total Revenue	1.84B	1.82B	1.77B	1.71B	1.64B	1.58B
Gross Profit	877.18M	868.22M	928.30M	883.30M	820.90M	809.40M
EBITDA	307.02M	304.91M	304.20M	295.10M	277.90M	297.60M
Net Income	156.40M	154.90M	156.30M	151.20M	151.90M	171.20M
Balance Sheet
Total Assets	752.23M	752.23M	741.50M	682.00M	696.80M	737.90M
Cash, Cash Equivalents and Short-Term Investments	22.26M	22.26M	30.00M	23.40M	46.30M	30.20M
Total Debt	383.90M	383.90M	377.70M	326.60M	334.10M	330.90M
Total Liabilities	604.63M	604.63M	622.70M	544.10M	559.30M	559.60M
Stockholders Equity	147.60M	147.60M	118.80M	137.90M	137.50M	178.30M
Cash Flow
Free Cash Flow	235.11M	233.99M	220.70M	199.90M	218.80M	227.80M
Operating Cash Flow	267.08M	265.57M	255.90M	232.30M	240.60M	251.80M
Investing Cash Flow	-43.06M	-42.53M	-65.90M	-38.30M	-20.70M	-41.60M
Financing Cash Flow	-232.13M	-230.60M	-183.00M	-217.30M	-204.40M	-309.70M

Dunelm Group Technical Analysis

Technical Analysis SentimentPositive

Last Price11.62

Price Trends

50DMA10.75Positive

100DMA10.85Positive

200DMA10.90Positive

Market Momentum

MACD0.32Negative

RSI62.11Neutral

STOCH23.58Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNLMY, the sentiment is Positive. The current price of 11.62 is above the 20-day moving average (MA) of 10.98, above the 50-day MA of 10.75, and above the 200-day MA of 10.90, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 62.11 is Neutral, neither overbought nor oversold. The STOCH value of 23.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DNLMY.

Dunelm Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DNLMY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	79Outperform	$29.77B	25.53	57.79%	1.16%	2.24%	7.35%
DNLMY	71Outperform	$2.34B	11.26	99.65%	7.43%	6.93%	3.60%
BOBS	68Neutral	$2.17B	16.09	31.18%	―	―	―
ARHS	63Neutral	$1.76B	25.11	17.23%	―	5.44%	-3.28%
W	62Neutral	$15.88B	-47.16	11.48%	―	7.46%	-2.70%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
RH	52Neutral	$2.78B	24.82	184.91%	―	3.35%	3.38%

* Consumer Cyclical Sector Average

Performance Comparison

DNLMY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DNLMY	Dunelm Group	11.62	-2.55	-18.03%
WSM	Williams-Sonoma	252.72	62.68	32.98%
RH	Rh	146.66	-23.41	-13.76%
W	Wayfair	115.91	12.61	12.21%
ARHS	Arhaus, Inc. Class A	12.45	3.05	32.50%
BOBS	Bob's Discount Furniture, Inc.	16.57	-0.45	-2.64%

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.

Date of analysis: Sep 11, 2026

Dunelm Group AI Stock Analysis