DFS cuts revenue guidance after muted UK retail Christmas
Furniture retailer DFS has slashed its revenue guidance as the UK’s retail sector continues to drag after a slow Christmas.
In a trading update today, the company said it was cutting projected revenues for the six-month period ending 23rd December from around £1.08bn to around £1.02bn as demand fell just over one per cent.
Gross sales were down 5.6 per cent, around £39m, year-on -year while non-underlying charges for the period are expected to be £6m, with a £4m cash cost relating to completing the planned closure of part of the firm’s manufacturing operations.
However, DFS expects to report profit before tax and brand amortisation (PBTu) for the first half slightly ahead of the prior year (FY23 £7.1m) and the full-year results in line with guidance at £30-35m PBTu.
Tim Stacey, the group’s chief executive, said:m”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% PBT target.”
In September, the company saw economic conditions batter its annual profits, cutting them almost in half, to £29.7m from £58.5m a year earlier, as the retailer was battered by economic conditions.
The Group will announce its interim results for the period ending 24 December 2023 on 19 March 2024.