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Dunelm Group PLC shares could be poised for a recovery after a difficult start to the year, according to JPMorgan, which has upgraded its recommendation. The homewares retailer has fallen 15% year to date after weak second-quarter sales and concerns over profit weighting between the first and second half.

Dunelm Group plc (DNLMY) Q2 2026 Earnings Call Transcript

Dunelm Group PLC told investors that first-half profit slipped despite higher sales, as a softer second quarter and the timing of costs offset a stronger gross margin and steady demand in core categories. The homewares retailer reported total sales of £926.3m for the 26 weeks to 27 December 2025, up 3.6% year-on-year, with digital participation rising to 41% of sales.

After Dunelm Group PLC's (LSE:DNLM) warned on profits last week, Deutsche Bank has lowered its price target from 1,360p to 1,200p but reiterated its 'buy' rating. Shares in the retailer fell 20% after its profit warning revealed margins in the second quarter came under pressure as operating cost inflation outpaced like-for-like sales growth.

Dunelm Group PLC (LSE:DNLM) warned on profits after reporting slower sales growth for the past quarter. The homewares retailer reported a 3.6% increase in total sales to £926 million for the first half of its financial year, with quarterly sales growth slowing from 6.2% in the September quarter to 1.6% in the three months to 27 December amid a competitive retail environment.