Sofa retailer DFS has grown revenue and profits despite an "unpredictable" market, but has warned of lower consumer confidence and footfall in recent weeks.
The Doncaster-based plc, which runs more than 100 shops, said it had delivered growth despite a "subdued" market, with revenue up 2.6% to £1.05bn and underlying profit before tax up from £30.2m to £44.9m. It told investors of record high market share at 40% and order intake growth of 2.6% thanks to more wealthy customers, refreshed product ranges and promotions.
Hot weather hits orders
But bosses warned that order intake in the weeks since the end of June was down 2.5% owing to hot weather affecting footfall and upholstery consumer demand in July and August.
Technology-equipped furniture under the Cinesound brand and an expanded 'Home' range were said to have helped boost orders, along with a brand partnership with Amanda Holden and associations with Britain's Got Talent and The Voice. Meanwhile, a showroom refit - including an upgraded Sofology showroom in Bolton - was said to have delivered returns.
Outlook for FY27
Looking ahead, bosses said that even though the market was subdued, they expected to deliver moderate profit growth in the 2027 financial year - in line with analyst consensus of profit before tax and brand amortisation of £48m.
Tim Stacey, group chief executive officer, said: "The performance delivered in FY26 demonstrates the fundamental strength, agility and resilience of the DFS Group. By maintaining disciplined cost management, improving gross margins to 58% and empowering our colleagues through data and technology, we delivered robust earnings growth and significantly strengthened our balance sheet."
"Looking ahead into FY27, market uncertainty continues to influence consumer confidence and footfall, and we remain appropriately cautious regarding the broader macroeconomic environment. However, our scale, culture and technology investments - all fuelled by our new purpose and values - provide us with a clear advantage."
"We remain confident in our ability to outperform the market and deliver moderate profit growth in FY27, where we are comfortable with current analyst profit before tax forecasts. Looking further ahead, we remain fully focused on achieving our medium-term £1.4bn revenue and 8% profit before tax margin targets and create sustained, long-term value for all our stakeholders."
