Shares in the company were seen up 3% to 5% ahead of market open, according to premarket indicators.

The company, which was founded in 1979 as a market stall business, said it expected gross margin to be slightly positive for the year, barring any impacts from coronavirus-related disruption or restrictions.

"Recent months have seen homewares become even more relevant, as people spend more time in their homes up and down the country," Chief Executive Officer Nick Wilkinson said.

In August, rival DFS Furniture highlighted strong performance helped by higher consumer spending on homes and latent demand caused by lockdowns, among other factors.

After cancelling last final dividend due to the health crisis, Dunelm in September said trading had been encouraging since its stores reopened and that it expected to pay an interim dividend in fiscal 2021 provided it faced no more "material impact" from the COVID-19 pandemic.

The company, which sells furnishings ranging from cushions and bedding to kitchen equipment, said sales came in at 359.1 million pounds for the 13 weeks ended Sept. 26.

Digital sales, which makes up nearly a third of the company's total, saw a 12% jump from the prior year.

(Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Subhranshu Sahu)