DFS Furniture PLC (LSE:DFS) on Friday backed guidance despite reporting that market demand has been weaker than anticipated.
The company reduced revenue guidance, slightly, but said this is expected to be offset by progress in lowering operating costs.
The sofa seller said group order intake dropped 1.1% in the twenty-six weeks to December 24 compared to last year, noting it had outperformed a challenging market.
DFS said overall market demand has been weaker than anticipated, down around 9% year on year in volume terms.
“We believe this performance was particularly impacted by record hot weather in September and early October when footfall and demand proved to be especially weak.”
It said demand has since recovered and profit guidance assumes market volumes are down 5% year on year through the remainder of the second half.
Gross sales were down 5.6%/£39 million year on year.
DFS expects first-half underlying profit before tax and brand amortisation (PBTu) to be up slightly year on year, supported by continued progress on gross margin and cost base improvements.
Full-year guidance was left unchanged at £30-35 million for PBTu (underlying profit).