DFS ‘cautiously optimistic’ following profit and sales growth during first half

For the 26 weeks to December 29, 2024, DFS said it expects profit before tax to come in at around £16m to £17m, up between £7m and £8m year on year.

Gross delivered sales are also anticipated to be up 1.4% year on year.

The retailer noted upgrades to its Sofology brand, which improved its order intake growth trajectory by increasing 19.1% year on year.

DFS attributed its profit growth to “higher sales, operating cost savings and gross margin improvement”, which it said “more than offset current inflationary increases”.

The furniture specialist said its winter sale trading period, which has already kicked off, has started “in line with expectations”.

Looking ahead, DFS said it expects full-year profi before tax growth to be “in line with current consensus”.

The group added that this is likely to be weighted to the first half thanks to a “cautious view on market demand” during the second half as a result of UK economic performance following the Budget.

DFS also said that its operational costs will increase during the second half as a result of the increases in national insurnace contributions, the national living wage and “higher than anticipated interest rates”.

DFS group chief executive Tim Stacey 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.

“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.”