DFS says it remains focused on its strategy of leading furniture retailing in the digital age as it sees signs that its market is growing once more.
The furniture retailer says it is well placed to gain market share despite an “uncertain” macroeconomic outlook” and “high” inflationary pressures.
DFS, ranked Top350 in RXUK Top500 research, says that while it had seen a “marked” softening in the upholstery market from April 2022, and “significant decline” in July and August – which it flagged up in its full-year results statement – the trend has become more positive since early September.
It has also seen evidence of market share gains from recent data from Barclays and CACI, and says its current performance puts it on track to meet its mid-range forecast – of £36m pre-tax profits in its current financial year. It expects that its profits will mostly occur in the second half of its year, “given the order intake profile we have seen year to date.”
Tim Stacey, DFS chief executive, says in a trading update and AGM statement today: “We are pleased to report that since mid-September we have seen positive year-on-year order volume growth. While we continue to be watchful of the macro economic environment, we continue to take market share and our market-leading position, inherent scale and proven strategy give us confidence in our future prospects.”
DFS reported group sales of £1.15bn in the year to June 26 2022, 9% higher than the previous year. At the bottom line, pre-tax profits came in at £58.5m. At the time, the retailer said it was seeing “unprecented Covid-related supply chain challenges” in “the most operationally challenging year that we can remember”. Raw material costs rose and customer demand softened.
Now the retailer says that its business has proven itself to be resilient and well positioned to gain market share. “Whilst the macroeconomic outlook is uncertain and inflationary pressures remain high, we remain focussed on executing our strategy to lead furniture retailing in the digital age,” it says in today’s statement. “Our business has proven to be resilient, and given our inherent strengths, we are well positioned to maintain our trend of market share gains across the economic cycle.”