DFS Furniture FY profits slump, warns of potential drop in sales

Furniture retailer DFS Furniture said on Thursday that profits had slumped in the twelve months ended 27 June and cautioned that sales could fall even further amid a dip in consumer spending.

DFS Furniture said pre-tax profits had fallen 43% to £58.5m as order numbers "softened markedly" in the fourth quarter of the trading year and the first three months of the new year as the cost-of-living crisis hit confidence amongst shoppers. Basic earnings per share were 64.3% lower at 12.3p and net debt ballooned 373.7% to £90.0m.

The London-listed group added that full-year revenues were up 8.5% at £1.14bn.

DFS outlined three potential profit scenarios for the current 2022-23 financial year, warning that underlying profits may plunge to £20.0m-54.0m if sales numbers decline by 5% to 15%.

Chief executive Tim Stacey said: "This has been the most operationally challenging year that we can remember with industry-wide Covid-related supply chain issues, double-digit cost inflation on raw materials, and ongoing colleague absence and skill shortages.

"Looking forward, the UK furniture market continues to be challenging and the outlook for the sector remains uncertain given the macroeconomic environment."

As of 0900 BST, DFS shares had slumped 13.25% to 117.80p.

Reporting by Iain Gilbert at Sharecast.com