Furniture retailer DFS has announced it expects to deliver pre-tax profits of approximately £45m for the financial year ending June 2026, despite a notable downturn in the market during the second half. The London-listed company, headquartered in Doncaster and operating over 100 showrooms, issued a trading update ahead of its full-year results, scheduled for September.
Profit Growth Amid Market Challenges
DFS directors now estimate full-year pre-tax profits will be around £45m, following previous guidance of between £43m and £50m. This represents an increase of roughly £15m year-on-year. The performance was driven by 2.7% revenue growth, gross margin expansion, and disciplined cost management. However, the company noted that signs of market recovery in the first half gave way to weaker demand in the second half, partially attributed to sentiment following the Iran war.
Order Intake Trends
Group order intake in the first half rose 2.3% year-on-year, but this reversed to a 4.4% decline in the second half. Full-year order intake fell 1%, which DFS said was broadly in line with the wider market. The company emphasized that its financial performance remained strong despite the softening market conditions.
CEO Comments
Tim Stacey, group chief executive, said: "I would like to express my gratitude to all our talented and dedicated colleagues, whose continued commitment strengthens the DFS Group and ensures outstanding products and services for our customers. Through the year we have made important strategic progress across the business while also delivering a strong financial performance."
Stacey added: "We have navigated the complex and changing market environment focusing on our customer propositions combined with disciplined cost management ensuring that we delivered our upgraded profit expectations despite the market softening in the second half. Importantly, a strong profit performance and capital rigour has enabled us to further reduce our net bank debt and improve our leverage position, providing the group with a solid financial foundation to navigate any further market volatility."
Future Outlook
DFS remains committed to its medium-term ambitions of £1.4bn in revenue and an 8% profit before tax margin. Stacey expressed confidence that the company's strategy will drive strong shareholder returns as market conditions improve. The retailer's focus on customer propositions and cost management has helped it weather the downturn, and the reduction in net bank debt strengthens its financial position for any future market volatility.
