DFS reports ‘good start’ to winter sales period; reiterates profit guidance

Furniture retailer DFS has reported a “good start” to its winter sale trading period with order intake up 10.6% when compared to pre-pandemic levels in 2019.

According to its latest interim trading update for the twenty six week period to 25 December 2022, order intake fell 4.8% year-on-year. Following low market wide demand levels at the start of the financial year, trading improved in the second quarter with order intake growth relative to FY19 increasing to +16.3% (+18.8% Vs FY22).

Group gross sales, which are recognised on delivery of orders to customers, are up +9.6% on the FY19 comparator period (-1.1% Vs FY22).

DFS said that current order intake performance “remains strong”, with the important winter sale trading period “starting well”.

“Whilst the macroeconomic and consumer outlook remains hard to predict, our mid case FY23 guidance remains unchanged at £36m profit before tax and brand amortisation, with the range narrowing to £30m-£40m,” the company said.

“This assumes the improved momentum we have seen in order intake continues through the second half, alongside delivery of planned margin improvements and normalisation of the order bank which remains elevated at the end of the first half due to the weighting of order intake. Profit delivery will be second half weighted with first half profits expected to be in mid-single digit £ millions.

“We remain committed to our strategy to lead furniture retailing in the digital age. Our scale, trusted brands, innovation, final mile two-man logistics platform, digital capabilities and integrated retail strategy give us significant advantages in our market and will allow us to maintain our track record of market share gains whilst driving attractive returns for our shareholders.”

Tim Stacey, Group Chief Executive, added: “The Group has traded well through the second quarter and the start of the important winter sale trading period. Whilst the macroeconomic environment remains challenging and hard to predict, we reiterate our full year profit guidance supported by the positive current trading momentum.

“As always, we continue to invest for the long term success of the business, to further strengthen our market leading position and with our established platforms, scale and expertise we believe we are well set up for growth over the medium term.”

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