Shares in DFS Furniture PLC (LSE:DFS) slumped after the furniture retailer revealed slowing market demand in the fourth quarter as the cost-of-living crisis hits customers.
In addition, ongoing COVID-19 linked supply-chain disruption and lower order intake since April meant production and deliveries levels missed expectations.
DFS cautioned it is difficult to forecast consumer behaviour over the next twelve months.
But said if the trends seen in April and May continue next year, they would "broadly balance the volume benefit from the elevated opening order bank".
In a trading update the group said for 2022 it now expects UK & Irish revenues of approximately £1.15bn to 1.16bn and underlying profit before tax and brand amortisation of £57-£62m. These compares to pre-pandemic FY19 pro forma 52 week revenues of £996.2m and profit before tax of £50.2m.
The group now expects to close the financial year with an order bank that is elevated by around. £30m or roughly 2.5% of annual revenues relative to pre-pandemic levels, which will provide some resilience going into 2023.
In response, broker Peel Hunt said: "We believe the competition is struggling and history tells us that DFS should emerge from crises stronger. We have no doubt that this will recur but for now, a sector multiple is the best we can hope for. We reduce our TP from 375p to 260p but keep our 'buy' rating."
Shares dropped 16.32% to 154.80p in morning trade.