DFS boosted by improved performance in first half
DFS has reported an improved performance in the first half of its financial year after it benefited from market share gains, lower operating costs and gross margin improvement.
In the 26 weeks to 29 December, group order intake was up 10.1% with its Sofology brand achieving an increase of 19.1%.
Meanwhile, first half pre-tax profit is expected to come in at around £16 million to £17 million to mark a £7 million to £8 million uplift on the prior year.
DFS attributed the profit increase to higher sales, operating cost savings and gross margin improvement, which more than offset inflationary increases.
Never Miss a Retail Update!The retailer added that its winter sale trading period has started in line with expectations.
Tim Stacey, DFS group chief executive, said: “While the market remains relatively subdued, we are continuing to deliver on our self-help initiatives having strengthened our position as the clear market leader, improved our gross margin and reduced our operating costs, all of which have helped us to deliver year-on-year profit growth.”
DFS continues to expect full year pre-tax profit to be in line with current expectations, although profit delivery is now likely to be weighted to the first half due to the UK’s economic performance post budget.
The retailer also cited the increase in second half operational costs due to the upcoming rises in national insurance contributions, and the national living wage, as well as higher than anticipated interest rates.
Stacey added: “We remain focused on executing our plan, and are cautiously optimistic despite the increased inflationary pressures and less positive market outlook for 2025.
“Looking forward, we are confident that the group is well positioned to drive attractive returns for shareholders as the market recovers and we remain focused on delivering our 8% PBT medium-term target.”
