Finance
UK's Dunelm plunges on warning that cautious consumer spending will hurt profits
Published by Global Banking and Finance Review
Posted on January 15, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on January 15, 2026
Jan 15 (Reuters) - British homeware retailer Dunelm's warning on Thursday that a challenging macroeconomic environment and cautious consumer spending would eat into its annual profit sent the company's shares to their lowest in nearly a year.
The retailer now expects profit before tax to be at the lower end of the market view of 214 million pounds to 227 million pounds ($287 million-$305 million) for fiscal 2026, according to a company-compiled consensus.
The specialist retailer of homeware and furniture and the broader industry have been navigating a challenging environment, particularly as shoppers tightened their spending during the crucial Black Friday period and festive season and sought cheaper deals.
Dunelm's shares were down 16.6% to 975.5 pence at 0845 GMT. They touched their lowest price since April 2025 and shares are on track to record their worst day ever, if trends hold. The stock was also the top loser among all London-listed equities.
"Whilst the UK retail environment remains variable, we have acted on some clear lessons from the first half, including targeted steps to improve availability," Chief Executive Officer Clo Moriarty said in a statement.
The retailer has tried to attract shoppers by improving product ranges and enhancing operations, which helped boost overall first-half sales, but aggressive discounts from competitors weighed on the second quarter.
Peel Hunt analyst John Stevenson said that competitor discounting was particularly high around Black Friday, which likely impacted sales as Dunelm maintained its margin position.
Dunelm, which sells items ranging from armchairs to kitchenware, said this year saw an "especially high level" of competitive activity in both digital marketing and discounting, which hurt its sales in the second quarter.
The company expects first-half pre-tax profit to be about 112 million pounds to 114 million pounds. First-half sales rose 3.6% to 926 million pounds.
($1 = 0.7447 pounds)
(Reporting by Ankita Bora in Bengaluru; Editing by Subhranshu Sahu, Alexandra Hudson)
Annual profit refers to the total earnings of a company after all expenses, taxes, and costs have been deducted from total revenue over a fiscal year.
Explore more articles in the Finance category
