DFS reports drop in half year sales and profits
Group revenue at DFS declined by 5.7% to £488 million in the retailer’s first half as “challenging” market conditions and political uncertainty impacted footfall in its stores.
In the 26 weeks to 29 December, underlying pre-tax profit pre IFRS was down 17.5% to £20.5 million.
The furniture retailer said it was able to mitigate some of the footfall decline by converting a higher percentage of customers than in the prior year and by growing its online revenues. The company’s online gross sales rose by 4.5% year-on-year.
During the period, the retailer invested in its omnichannel proposition by improving the quality of its customer service and delivery operations. It also accelerated the roll-out of new showrooms for its Sofology brand.
Tim Stacey, DFS group chief executive, said: “We continue to make progress on our strategic agenda focused on driving the DFS core business, further developing our group platforms and setting Sofology up for future growth.
“Despite the challenging retail environment, and excluding some isolated systems disruption in Sofa Workshop, our performance over the first half has been as expected, given the exceptional prior year comparative driven by latent demand. In particular we have seen a good performance by the DFS brand in driving conversion and margins and continued online sales growth.”
DFS said trading in its second half has been satisfactory so far but warned that the coronavirus outbreak meant that it could not give guidance with any certainty for its full year.
Stacey added: “Notwithstanding the uncertain short-term outlook, we remain confident in the group’s financial strength and relative track record of performance in all environments. Furthermore, we believe our leading market position will allow us to drive long term attractive value creation for our shareholders.”
