British sofa retailer DFS has upgraded its profit expectations for the year, citing a stronger-than-anticipated performance in its first half and a solid start to its crucial winter trading period.
Data-Driven Growth in a Flat Market
The London-listed furniture group reported that it is successfully harnessing data analytics to stimulate customer demand across its brands, which include DFS and Sofology. Chief Executive Tim Stacey stated this approach was helping to drive order growth "in a broadly flat market."
For the six months to 28 December, the company saw a 2.3% increase in orders compared to the same period last year, with both of its main brands contributing to this growth. Gross sales for the full year, which are logged upon delivery to customers, are anticipated to be up by nearly 9%.
Winter Promotions and Profit Surge
The retailer's important winter sale, supported by national marketing campaigns and TV advertising, began in line with management expectations. These promotional periods are a key engine for the company's annual revenue.
This trading momentum has translated directly to the bottom line. DFS now expects underlying pre-tax profit for the first half to reach between £30 million and £31 million. This represents an increase of up to £14 million on the previous year.
Cautious Optimism for the Full Year
Despite the positive update, the company acknowledged ongoing challenges. It cautioned that the macroeconomic and consumer outlook remains difficult to predict, with many households tightening their budgets and postponing major purchases like furniture.
Nevertheless, based on its recent performance, DFS has raised its full-year guidance. It now forecasts an underlying pre-tax profit of between £43 million and £50 million for the full financial year, surpassing its previous forecast of £41 million.
"We have continued to make good progress growing our gross margins and managing our cost base effectively," added CEO Tim Stacey, underscoring the operational discipline behind the improved figures.
