DFS has slashed its sales guidance for the year after reporting “weaker than expected demand”.
The sofa giant reported gross sales were down £39m or 5.6% year on year in the 26 weeks to December 24, which it attributed to “the record hot weather in September and early October when footfall and demand proved to be especially weak”.
Group order intake for the retailer was also down, slipping 1.1% year on year over the period.
As result, DFS has reduced its full-year sales forecast to “reflect the weaker than expected demand”.
Revenues are now expected to come in at between £1.02bn and £1.04bn, compared with a previously anticipated range of £1.06bn and £1.08bn.
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Despite the lowered guidance, DFS said it was confident in delivering its pre-tax profit guidance of between £30m and 35m “supported by continued progress on gross margin and cost base improvements”.
The retailer’s group chief executive Tim Stacey said: “The group has performed well in tough trading conditions.
“Despite the weaker than expected market, good operational performance and progress on gross margins and lowering our cost base have enabled us to deliver a profit for the first half that is slightly ahead of the prior year and we remain on track to deliver our full year profit target.
“Looking forward, the group has good growth prospects and is well positioned to drive attractive returns for shareholders, capitalising on market recovery as well as growing our Home offering and delivering our 8% pre-tax profit target.”
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