Furniture retailer DFS sees profits cut by almost half in the past year as boss blames ‘tough economic climate’

Sofa chain DFS stuck to its 2024 financial forecasts despite results showing a downturn in profit, with the firm admitting it is operating in a ‘tough climate’.

The Doncaster-based company revealed pre-tax profit had fallen in its preliminary results by 49.2 per cent to £29.7million for the year to 25 June.

However, the firm stuck to its previous forecasts and said it still expects profits of between £30million and £35million.

DFS shares were up 7.28 per cent to 115p in morning trading on Thursday.

DFS said revenue from continuing operations fell 5.2 per cent year on year to £1.09 billion for the financial year as it saw the ‘weak economic backdrop’ hamper customer spending.

DFS revealed in March this drop was mainly due to the cost-of-living squeeze which it said was forcing shoppers to cut back on big-ticket items like sofas, leading the wider market to a 15 to 20 per cent fall in sales volumes this year.

Tim Stacey, group chief executive officer of DFS, said: ‘The group is operating in one of the toughest economic climates we have experienced. 

‘While we are confident the upholstery market will recover, forecasting the specific timing and pace of the recovery is challenging.

‘We do, however, expect to generate a modest year on year increase in profit before tax in FY24 despite a relatively weak market in which we expect volumes will continue to decline across the next 12 months.’