Sofa giant DFS has reported a fall in demand but still expects to meet full-year earnings expectations.
DFS cut its full-year revenue forecast after suffering lower-than-expected demand, which it partly attributed to unhelpful weather.
The retailer revealed that group order intake was down by 1.1% year on year in the 26 weeks to December 24, 2023.
It said, however, that it had outperformed in a challenging market and that first-half profits will be just ahead of last year’s, “supported by continued progress on gross margin and cost base improvements”.
DFS reported: “Overall market demand has been weaker than anticipated, down approximately 9% year on year in volume terms.
“We believe this performance was particularly impacted by record hot weather in September and early October when footfall and demand proved to be especially weak. We have since seen demand recover and our profit guidance assumes market volumes are down 5% year on year through the remainder of the second half.”
Full-year revenues are now expected to come in at between £1.02bn and £1.04bn, compared with a previously anticipated range of £1.06bn and £1.08bn. Profits should be between £30m and £35m.
Chief executive Tim Stacey 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% [pre-tax profit] target.”