Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

DFS Furniture expects lower 2018 profits after heatwave and supply issues hit sales

DFS Furniture sees like-for-like sales falling 3% in the 23 weeks to July 7
dfS
Shares in DFS fell in morning trading

DFS Furniture Plc (LON:DFS) said it expects a decline in 2018 earnings after the UK’s heatwave and supply issues hit fourth quarter sales.  

The furniture retailer estimated underlying earnings (EBITDA) for the year will be "below" the £82.4mln reported in 2017.

The company said in the final quarter it suffered a disruption to ships bringing made-to-order products from the Far East, while the hot weather led to “significantly” lower-than-expected order intake.

READ: DFS Furniture shares jump as it sounds confident note on outlook

As a result, like-for-like sales are expected to fall 3% in the 23 weeks to July 7 and drop 4% in the 49 weeks to the same date.

A slowdown in the housing market and a tough retail market also contributed to weaker sales.

DFS said: “We continue to expect that the furniture retail market will remain challenging over the next twelve months, given ongoing reduced consumer confidence levels, although we would expect some alleviation of current short-term demand effects.”

The group believes investments in its supply chain and the recent acquisition of Sofology will provide “benefits to earnings that we expect to help mitigate the challenging sales environment”.

READ: DFS Furniture and Sofology couch their differences over branding by agreeing takeover deal

DFS said it has a track record of capitalising on adverse trading conditions to build its market share and believes its cash generation and long-term growth prospects will drive “attractive returns” for shareholders.

Shares fell 2.8% to 193p in morning trading. 

View full DFS profile View Profile

DFS Furniture Plc Timeline

Related Articles

H&T Pawnbrokers store
July 02 2018
Last year the company saw gross profits jump 45% thanks to a booming personal loan book and robust sales of luxury second-hand watches and jewellery.
Flying Brands
Tue
“We look forward to the future with confidence and excitement," said Flying Brands boss Trevor Brown.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use