Sofa retailer DFS Furniture has reported slumping annual profits and warned over a further hit to its bottom line over the year as it said industry sales could fall by up to 15% amid a dip in consumer spending. The group reported a 43% tumble in pre-tax profits to £58.5 million in the year to June 26.
On an underlying basis, pre-tax profits were 45% lower at £60.3 million. DFS said order numbers have “softened markedly” in the last quarter of the financial year and first three months since the year-end as the cost-of-living crisis impacts shopper confidence.
It outlined three profit scenarios for the 2022-23 year, warning that underlying profits could plunge to between £20 million and £54 million if sales numbers across the market decline by between 5% to 15%.
Tim Stacey, group chief executive of DFS, said: “This has been the most operationally challenging year that we can remember with industry-wide Covid-related supply chain issues, double digit cost inflation on raw materials and ongoing colleague absence and skill shortages.”
He added: “Looking forward, the UK furniture market continues to be challenging and the outlook for the sector remains uncertain given the macroeconomic environment.
“From the fourth quarter of the year, we saw a reduction in the volume of orders, which we believe is consistent with the overall furniture retail market, although our elevated order bank will provide some resilience as we enter our 2023 financial year.”
