DFS posts stronger profits than expected in “weak market”

This meant underlying profit for the full year was £30.2m, slightly above previous guidance of between £25m and £29m.

“Through focusing on what we can control and executing our strategy we have grown profits and cash flows in a weak market environment,” said group chief executive Tim Stacey.

The revenue increase was around half that of the reported order intake growth of 8.7%. DFS attributed this to pushing their interest free credit offer to drive demand in the weak market, Easter timing and a move by customers to ranges with longer lead times. Total revenue for the year was just above £1bn.

In like-for-like terms (as DFS’ 2024 financial year was 53 weeks long), orders were up 10.2%, a strong change on the 1.8% decrease seen in 2024.

Like other retail bosses, Stacey warned about a subdued consumer environment but said that there were some factors that looked positive for the upholstery sector. “Consumer confidence remains below the long-term average and inflation remains elevated but housing transactions have been recovering, consumer savings levels are relatively high and interest rates look set to fall.

“Given the market share gains that we have made in the last few years, the recovery in our gross margins and the significant reduction in our cost base, despite inflation, I am optimistic about the future.”

DFS said it was comfortable with market expectations of a further increase in underlying profit during the current trading year to reach £39.4m.