DFS has lowered its sales and profit guidance for the full year despite reporting a “resilient profit performance” through the first half.
The sofa retailer warned that potential disruptions due to ongoing attacks in the Red Sea could hit future deliveries.
“If the Red Sea issues continue through to our year end, potential delivery delays could result in up to £4m of profit being deferred into our following financial year,” it said.
For the 26 weeks to December 24, the business posted underlying pre-tax tax profit of £8.7m.
DFS also experienced a 7.2% decline in sales to £505.1m.
The retailer said revenues were expected hit between £1bn and £1.015bn for the year.
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The business said the upholstery market had been “more challenging and volatile than expected” with orders falling around 10%, more than it had anticipated.
It insisted it had grown market share, but that after a solid start to January, market demand had weakened significantly over the last two months, with orders down 16% in January and February.
Chief executive Tim Stacey said: “Whilst the current macroeconomic situation has presented many challenges, we are pleased to have extended our market leadership while reporting a resilient profit performance through the first half.
DFS said it was “well positioned for the future” due to strong customer service scores, controls on costs and increased market share.
It vowed to prioritise growth, improved margins and efficiency savings.
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