Sofa giant DFS doubles profit but warns of ‘challenging’ market in 2019
Sofa giant DFS more than doubled profits at the end of last year but warned of a softer start to 2019 and a “challenging” market in the year ahead.
The furniture retailer reported pre-tax profits of £14.1m in the 22 weeks to the end of December, compared with £6.2m the previous year as online sales grew due a new digital strategy.
Read more: DFS reports sales growth but warns on political uncertainty
Revenue rose 29.1 per cent to £422.3m following the acquisition of specialist sofa retailer Sofology in 2017.
DFS said order intake in the second half of the financial year had been lower than the first half but maintained its profit expectations.
Shares in the company fell 1.5 per cent to 232p following the results this morning.
Chief executive Tim Stacey said: “The benefits of our investments in our online channels, delivery networks and the development of our brands help mitigate the impact of a market which we expect to remain particularly challenging in 2019 given the current political and economic uncertainty.”
He added: “Notwithstanding a softer start to 2019, and assuming no weakening of this environment, our profit expectations for the financial year remain unchanged.”
The company also benefited from a TV campaign in the Netherlands – pushing a ‘tax-free’ promotion which increased like-for-like sales by 29 per cent.
Read more: DFS shares wobble after pre-tax profits halve in full-year results
Stacey said the company continued to monitor the impact of Brexit and said uncertainty had weakened consumer confidence.
DFS also said it was concerned over potential border delays as over half of its products were imported from mainland Europe or China, while also flagging fears over increased regulation, tariffs, exchange rates and the impact on its workers from the EU.