Sofas giant DFS has posted a fall in quarterly sales and earnings but is continuing to invest in expansion and confident in longer-term prospects.
After investment of £2m, DFS generated EBITDA of £8.7m in the 13 weeks to October 29 compared to £15.2m in the comparable period last year. Revenues fell from £149.6m to £128.2m.
DFS has opened seven new shops in the year to date and expanded its UK manufacturing operations, creating 500 jobs.
DFS chief executive Ian Filby said that demand had remained weak and was especially poor in August.
But he maintained: “Although we expect no early improvement in the trading environment, we are confident that DFS has the right strategy, proposition and team to manage the business through these tough conditions.
“The current investment in new stores and manufacturing will continue to drive our market share and we will also focus on margin, costs and cash generation to deliver a good financial performance over the year as a whole.”
Cash balances at the end of the quarter were up £24.9m to £47.2m. Since the period end the retailer has completed a £5m bond buy-back, and investors are to be paid a dividend of £17m.