Heatwave hits DFS sales
Retailer DFS said this morning it expects full-year 2018 earnings to be below those in 2017 as it suffers from the impact of hot weather that has kept shoppers out of its stores.
Doncaster-based DFS said revenues had fallen around 4% like-for-like over the 49 weeks to July 7, while it also suffered from disruptions to its supplies from the Far East.
“Exceptionally hot weather, including over key trading weekends, has led to significantly lower than expected order intake.
“Over the period we have also experienced disruption outside of our control to ships bringing made-to-order products from the Far East.”
However, Doncaster-based DFS said that variable cost flexibility and reductions to discretionary costs have provided some mitigation to this recent trading environment, but that it currently anticipates reporting EBITDA for the full financial year below the prior year (FY17 £82.4m).
“This will reflect the timing of the arrival of products from the Far East before the financial year end,” it said.
Looking ahead, the company said: “We continue to expect that the furniture retail market will remain challenging over the next twelve months, given ongoing reduced consumer confidence levels, although we would expect some alleviation of current short-term demand effects.
“Our previous investments in our supply chain and the recent acquisition of Sofology, together with progress expected at Dwell and Sofa Workshop will provide benefits to earnings that we expect to help mitigate the challenging sales environment. The group has historically capitalised on adverse trading conditions to build our market position and we continue to believe that our cash generation and long-term growth prospects will drive attractive returns for our shareholders.”
