Q2, 13 weeks to 31st December 2022 Q2 total sales have accelerated sharply and are up 18% YoY (+48% 3YoY) , (FY23 Q1: -8% YoY, +36% 3YoY). The timing of the Winter Sale benefitted sales by 4ppts in the period which reverses in Q3. Management saw broad based sales across all categories with strong growth in both stores and online. Today’s result effectively implies that total sales can afford to fall c. 7% in H2 to meet existing pre-statement full year consensus sales growth estimates of -3% YoY. By way of reference, pre-pandemic sales comparatives are broadly neutral. Gross margins are in line with guidance and were down 170bps YoY in Q2, having been -130bps at Q1, with a modest headwind of c.30bps from the timing of the Winter Sale. Management has good visibility on input costs for the remainder of FY23 as well as FX and therefore guidance for full year margin of c.50% remains unchanged with gross margin in H2 anticipated to be lower than H1 - due to the two Sale events in the period. We note pre-pandemic gross margins eased going into H2. Outlook & view FY23 guidance remains unchanged, and as such management now expects PBT to be above market expectations of £172m. Before speaking to management, we would expect FY23 consensus expectations to rise at least 10%, given the strength of the Q2 print. This is clearly a strong result despite tough pandemic comparatives, proving that Dunelm has the ability to win share in all channels without compromising margin. Forecasts, TP and recommendation placed Under Review.