DFS H1 sales decline but FY profit seen in line with market views

Furniture retailer DFS reported a decline in interim revenue on Tuesday but said full-year profit was set to meet market expectations.

In an update for the 26 weeks to 29 December, the company said gross sales fell 6% from the "strong" comparative period and reflecting a "challenging" consumer environment, particularly in August and September.

However, it noted that order intake momentum has since strengthened and the key winter sale trading period has started "satisfactorily".

"We expect that full-year profit before tax and brand amortisation will be broadly in line with market expectations, subject to achieving the low single digit revenue growth that we assume in our plan," DFS said. Consensus forecasts for the year to 28 June 2020 are in a range of £50m to £53.6m, compared to £50.2m in the year to the end of June 2019.

DFS said its expected revenue growth is supported by recent trading momentum and the benefit of opening a number of new showrooms in the first half.

"We are mindful of the broader political and economic uncertainty that still exists. However, we have made good progress on our strategic initiatives, driving showroom conversion and online growth. Furthermore, we have appropriate cost saving actions in place to help mitigate continued market weakness."

At 0950 GMT, the shares were down 7.9% at 257.81p.