DFS annual profits slump as customers reign in on big spends after weak pound
ANNUAL profit at furniture retailer DFS slumped by more than a fifth as consumers reined in spending on big-ticket items and a weak pound pushed up costs.
DFS admitted the falling demand had been 'unexpectedly severe'
The company admitted the falling demand had been "unexpectedly severe" as it posted a 22.3 per cent drop in pre-tax profit to £50.1 million on 0.9 per cent higher revenue of £762.7 million.
Chief executive Ian Filby said the outlook was "uncertain" but DFS will "maintain our plans for growth investment".
It has identified cost saving opportunities and has "excellent prospects for the longer term".
Mr Filby said: "The weakening in demand proved unexpectedly severe.
DFS has been hit by 'a double whammy of slowing consumer demand and rising cost'
The UK furniture market continues to be very challenging and the outlook for the sector remains uncertain
"The UK furniture market continues to be very challenging and the outlook for the sector remains uncertain."
Mr Filby added: "It was a tough three or four months but the market tends to balance itself out over a longer period. That appears to be happening this year."
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: "DFS has been hit by a double whammy of slowing consumer demand and rising costs, stemming from a weaker pound.
"Big-ticket items like sofas tend to be the first things consumers cut back on when they are feeling the pinch."
Shares fell 9½p to 215½p.