DFS profit down in ‘challenging’ market
Furniture retailer DFS has reported a 22.3% drop in full year pre-tax profit after battling against a “challenging” UK furniture market.
In the year to 29 July, pre-tax profit was £50.1 million compared to £64.5 million in the previous year.
Meanwhile, EBITDA was down 12.7% to £82.4 million although revenue edged up 0.9% to £762.7 million. Gross sales were up 1.1% to £990.8 million.
Ian Durant, DFS chairman, said: “Although we saw strong revenue growth in the first six months of the financial year, continuing uncertainty in the economy led to a significant deterioration in the consumer market which impacted sales in the second half of the year.
“The continued weakness of Sterling against the US dollar has also created a headwind for gross margins, some of which we have been able to mitigate through the actions that we have taken. As a consequence, although revenue was slightly ahead of last year, we have experienced a decrease in reported profit before tax.”
During the year, DFS announced it was acquiring sofa retailer Sofology. It also focused on broadening its appeal to customers and, a year ahead of plan, achieved a long-term target of gaining a 25% share of the “aspirational consumer” market.
The company opened three new 10-15,000 square foot stores in the UK and Ireland. It also launched a third small store trial in Crawley.
DFS chief executive Ian Filby said: “We have continued to make good strategic progress across all our key areas of growth, while our financial performance reflects the current challenges of the UK furniture market.”
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