19 March 2024 , 08:29
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DFS, the furniture retailer, has had to lower its sales and profit targets for the year because demand has "weakened significantly" in the last two months.
The company also warned that profits could be hit even more if there are continued disruptions to shipments through the Red Sea. DFS told its shareholders on Tuesday morning that after a strong start to January, demand began to slow down.
This resulted in a 16% drop in order volumes across January and February compared to last year. The company now expects revenues of between £1 billion and £1.015 billion for its financial year ending in June, which is up to £65 million less than previously predicted.
Profits are also expected to be £10 million lower than originally forecasted, with new predictions suggesting pre-tax profits of £20 million to £25 million for the year. However, this doesn't take into account any further disruption to products being shipped through the Red Sea, which could delay an additional £4 billion from this year's profits to next year.
DFS remains "cautious" about consumer confidence improving and doesn't expect to see a benefit in higher demand until the summer. The company also revealed that revenues fell by 7.2% to £505.1 million for the six months leading up to December 24.
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Group chief executive Tim Stacey said: "I want to thank our colleagues for their dedication toward providing a first-class service to our customers. Whilst the current macroeconomic situation has presented many challenges, we are pleased to have extended our market leadership while reporting a resilient profit performance through the first half."