DFS issues warning over full-year earnings

DFS update

DFS has issued a warning over its full-year earnings as a result of the recent heatwave denting sales and delays in shipments from overseas suppliers.

In a pre-close trading update circulated this morning, the furniture retailer said it had seen “significantly” lower-than-expected orders in its fourth quarter so far.

It blamed the hot weather putting off customers over key trading weekends.

It also blamed “disruption outside of our control” to ships bringing made-to-order products from overseas suppliers, namely those in the Far East.

DFS said total like-for-like sales in the core business were about three per cent lower in the 23 weeks to July 7, and around four per cent lower in the 49 weeks of the fiscal year so far.

As a result, the retailer warned that full-year underlying earnings were now expected to be lower than the £82.4 million reported the previous financial year.

“We continue to expect that the furniture retail market will remain challenging over the next 12 months, given ongoing reduced consumer confidence levels, although we would expect some alleviation of current short-term demand effects,” DFS stated.

“Our previous investments in our supply chain and the recent acquisition of Sofology, together with progress expected at Dwell and Sofa Workshop, will provide benefits to earnings that we expect to help mitigate the challenging sales environment.”

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