DFS Furniture (DFS) Trading Update summary

Financial performance and guidance

• FY24 revenue now expected at £995m–£1,000m, slightly below previous guidance due to delayed deliveries and weak demand.

• Profit before tax (PBT) guidance reduced to £10–12m, impacted by Red Sea shipping delays and higher freight costs.

• £12–14m of customer deliveries delayed to FY25, affecting current year revenue recognition.

• Net bank debt projected at £165–170m, with a total facility size of £250m.

Market conditions and operational actions

• Upholstery sector demand declined about 10% year-on-year, reaching record lows.

• Maintained record value market share above 38.5% despite weak market.

• Full-year gross margin rate expected to rise by 140bps year-on-year.

• Operating costs reduced by approximately £25m year-on-year, excluding depreciation and interest.

Recent trading and outlook

• Group order intake up over 9% in Q4 to date, reflecting improved trading and successful initiatives.

• Product range and pricing improvements in Sofology and selective reintroduction of 4-year interest-free credit supported order growth.

• Anticipates market recovery in FY25 as inflation and interest rates are expected to fall.

• Positioned to benefit from market recovery due to market leadership and operational leverage.