DFS Furniture swings to loss in 'extremely challenging' market

25th Sep 2024 07:50

(Sharecast News) - DFS Furniture said on Wednesday that it swung to a full-year loss in an "extremely challenging" market.

In the 53 weeks to 30 June 2024, the company swung to a reported pre-tax loss of £1.7m from a profit of £29.7m a year earlier, with revenue down 9.3% to £987.1m. This was put down to "record low" market demand and Red Sea shipping disruption deferring sales and profits to future periods.

DFS said its revenue performance was impacted by the "significant" fall in market volumes year on year and on pre-pandemic levels. In addition, the furniture retailer said it had to absorb "significantly" higher costs due to high levels of international freight rates and continued elevated interest rates.

Chief executive Tim Stacey said: "Despite the challenges that the business has seen, we are optimistic for the future and see signs that market growth could soon return. We expect recent improvements in housing transaction data and strengthening consumer balance sheets to lead to increased upholstery market demand across the FY25 financial year.

"In addition, thanks to the success we have had growing our gross margin and improving our operational efficiency we expect to deliver profits in line with market consensus, weighted to the second half.

"It is clear that the upholstery market has a long road to recovery given the 20% decline on pre-pandemic levels that we have seen. Despite the challenges we have faced, we remain confident that the business is well positioned to capitalise on market recovery."