Full year profit target on track at DFS, despite weaker demand
Furniture retailer, DFS, says overall market demand has been weaker than anticipated – down about 9% year-on-year in volume terms, as it publishes a trading update for the 26 week period to 24 December 2023,
The Doncaster-headquartered firm says it believes its performance was impacted by record hot weather in September and early October when footfall and demand proved to be especially weak.
However, it adds it has since seen demand recover, with the company’s profit guidance assuming market volumes are down 5% year-on-year through the remainder of the second half.
DFS says while it has not been immune to market volatility and weaker demand, group order intake for the period of -1.1% year-on-year was still ahead of the market.
The business predicts its first half underlying profit before tax and brand amortisation is expected to be up slightly year-on-year (FY23 £7.1m). Full year profit guidance remains unchanged at £30m-35m (FY23 £30.6m).
Tim Stacey, group chief executive, said: “The group has performed well in tough trading conditions.
“Despite the weaker than expected market, good operational performance and progress on gross margins and lowering our cost base have enabled us to deliver a profit for the first half that is slightly ahead of the prior year and we remain on track to deliver our full year profit target.
“Looking forward, the group has good growth prospects and is well positioned to drive attractive returns for shareholders, capitalising on market recovery as well as growing our Home offering and delivering our 8% profit before tax target.”
DFS will release its interim results for the period ending 24 December 2023 on 19 March 2024.
