DFS pulled in heavy losses during its latest annual results, as shipping delays in the Red Sea and the impacts of higher interest rates on borrowing took their toll.
For the 53 weeks to 30 June, the furniture giant posted a pre-tax loss of £1.7m compared to a profit of £29.7m in the prior year, although gross margin rate progression and operating efficiency cost savings partially offset the weaker market conditions.
Sales fell 7.9% to £1.31bn, as the retailer saw a 1.8% year-on-year decline in order intake amid weak demand and Red Sea shipping delays.
Looking ahead, DFS said its FY25 trading was in line with expectations, adding it remained confident in delivering its £1.4bn sales and 8% pre-tax profit targets.
It expects its market to gradually recover during the course of the year as the housing market and household disposable income improves.
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DFS chief executive Tim Stacey said: “Despite the challenges that the business has seen, we are optimistic for the future and see signs that market growth could soon return.
“We expect recent improvements in housing transaction data and strengthening consumer balance sheets to lead to increased upholstery market demand across the FY25 financial year.”
“In addition, thanks to the success we have had growing our gross margin and improving our operational efficiency we expect to deliver profits in line with market consensus, weighted to the second half.”
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