DFS warns on profit after demand slows
Furniture retailer DFS has reported that second half trading has weakened beyond its expectation with a “significant” decline in store footfall leading to a reduction in customer orders.
The company now anticipates that EBITDA over the full year will be lower than market expectations for the current year, and in the range of £82 million to £87 million.
In a statement DFS said: “We believe these demand effects are market-wide, in line with industry indicators, and are linked to customer uncertainty regarding the general election and the uncertain macroeconomic environment. As stated previously, the upholstery market does see short-term demand fluctuations from time-to-time, within an overall historical trend of long-term growth. “
The company said it will maintain investment in the business and is confident that it will outperform the market over the longer term.
It added: “We believe our expectations for the next financial year are realistic based on consumer confidence remaining broadly in line with current levels, given its consequent impact on upholstery demand. We expect continued strong cash generation that has allowed the recent announcement of a £20 million special dividend in addition to our ordinary dividend.”
