Furniture retailer DFS has cited delivery delays caused by the on-going Red Sea crisis and “weaker market demand” for lowering its profit guidance.
“If the Red Sea issues continue through to our year end, potential delivery delays could result in up to £4mn of profit being deferred into our following financial year,” DFS said in a statement issued to the London Stock Exchange.
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DFS has lowered its profit guidance for its full financial year to between £20mn and £25mn. During its prior 12 months, DFS’s pre-tax profits totalled almost £30mn. It has also reduced its revenue expectations by between £60mn and £65mn.
The sofa retailer’s latest results, for the 26 weeks until 24 December 2023, showed a 7.2% drop in sales to £505.1mn. DFS posted underlying pre-tax tax profit of £8.7mn.
DFS stressed the upholstery market had been “more challenging and volatile than expected” with orders falling around 10%, more than it had anticipated. But looking ahead was confident in both its long-term growth strategy and the capability to deliver on objectives.
Tim Stacey, chief executive, DFS, 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.
“I want to thank our colleagues for their dedication toward providing a first class service to our customers.”
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