Furniture retailer DFS sees profits cut by almost half in the past year as boss blames ‘tough economic climate’

Sofa chain DFS maintained its financial forecasts for 2024 despite results showing a drop in profits, and the company admitted it is operating in a “difficult climate”.

The Doncaster-based company revealed that pre-tax profit had fallen in its preliminary results by 49.2 per cent to £29.7 million for the year to June 25.

However, the company stood by its previous forecasts and said it still expects profits of between £30m and £35m.

DFS shares They rose 7.28 per cent to 115 pence in morning trading on Thursday.

DFS said revenue from continuing operations fell 5.2 percent year-on-year to £1.09 billion for the financial year as it saw the “weak economic backdrop” hamper customer spending.

DFS revealed in March that this drop was mainly due to the falling cost of living which it said was forcing shoppers to cut back on big-ticket items such as sofas, leading the overall market to fall by 15 to 20 percent. percent in sales volumes this year. year.

Tim Stacey, DFS group chief executive, said: ‘The group is operating in one of the most difficult economic climates we have experienced.

‘While we are confident that the upholstery market will recover, forecasting the specific timing and pace of recovery is challenging.

“However, we expect to deliver a modest year-on-year increase in pre-tax profits in FY24 despite a relatively weak market where we expect volumes to continue to decline over the next 12 months.”