DFS has reported a full-year profits slump, which outgoing boss Ian Filby attributed to “an exceptional downturn in market demand” in the fourth quarter.
The furniture retailer posted a 48.5% fall in reported pre-tax profit to £25.8m in the 52 weeks to July 28, while underlying pre-tax profit excluding brand amortisation was down 23.7% to £38.3m.
The retailer’s revenue excluding its acquisition of Sofology last November was down 2% to £747.7m, but up 14.1% to £870.5m including the firm.
DFS online sales increased 15.1% during the period and it opened three new stores, taking its overall store estate to 116.
The retailer also trialled a new small store format in Chelmsford and Guildford during the year.
Outgoing chief executive Ian Filby, who will hand over the reins to Tim Stacey at the end of this month following a six-month handover period, said: “We have continued working to develop the group’s strategic and market position; however, financial results for the year reflected the exceptional downturn in market demand we saw in the fourth quarter.
“We are pleased to note that the market has recovered since the start of the new financial year, with the group seeing like-for-like order growth across all brands over the first nine weeks.
“We believe, however, we are benefiting from deferred purchases in the prior financial year and overall we expect the market to remain subdued into 2019, constrained by political risk and weak consumer sentiment.”