LONDON - DFS Furniture, a leading British furniture retailer, today maintained its full-year profit forecast, projecting underlying pretax profits to be in the range of £30-35 million. This announcement comes despite the company facing a more significant than previously reported year-over-year market volume decrease of 9% and experiencing reduced consumer demand. However, DFS Furniture predicts a smaller -5% dip in market volume moving forward.
CEO Tim Stacey voiced confidence in the resilience of the company, attributing its ability to maintain profit forecasts to strategic cost reductions and operational efficiencies. Stacey highlighted the company's commitment to its strategic growth plans and emphasized an 8% pretax profit margin target. Despite current market volumes trailing more than 20% behind pre-pandemic levels, DFS maintains optimism for growth based on shareholder returns enhancement strategies focusing on gross margin improvements and cost base efficiencies alongside their Home segment expansion plans.
The company's latest financials also indicate a group order intake down by -1.1%, influenced by adverse conditions including extreme heat affecting September-October sales. However, DFS expects H1 PBTu slightly above last year's £7.1m despite gross sales falling by -5.6% YoY due to prior period comparisons.
DFS Furniture has also accounted for expected non-underlying charges of about £6m (£4m cash), associated with manufacturing shutdowns and efficiency programme costs, consistent with an annual forecast of £7m (£5m cash). While revenue forecasts have been lowered owing to weak demand, DFS retains its full-year profit guidance at £30-35m PBTu.
Investors and stakeholders are looking forward to DFS Furniture's interim report, which is scheduled for release on March 19, 2024. The report will provide insights into the company's performance up to December 24, 2023, and will likely offer a more detailed view of how DFS has navigated the challenging retail environment.
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