(Reuters) -British sofa retailer DFS Furniture posted annual profit above market estimates on Thursday, helped by higher order intake despite a subdued market, which the company signalled is persisting amid low consumer confidence and high inflation.
British retailers are contending with a cooling market and affordability challenges as households prioritize essential spending over big-ticket purchases. However, DFS has been managing costs to boost profits and has seen strong demand.
“Consumer confidence remains below the long term average and inflation remains elevated but housing transactions have been recovering, consumer savings levels are relatively high and interest rates look set to fall,” CEO Tim Stacey said.
“The market demand drivers for the upholstery sector remain delicately balanced.”
The company scrapped its annual dividend citing an uncertain macro environment. However, DFS said it was planning for profit growth in fiscal 2026 after trading in the new financial year was in line with its expectations.
At least two brokerages flagged that DFS seems to be gaining market share, which would boost its business and were upbeat on current result, despite the “vague” comments on trading and sentiment.
It reported 30.2 million pounds ($40.62 million) in adjusted annual profit before tax and brand amortisation for the year ended June 29 against analyst expectations of 27.9 million pounds, according to a company-compiled consensus.
($1 = 0.7435 pounds)
(Reporting by DhanushVignesh Babu and Pushkala Aripaka in Bengaluru; Editing by Rashmi Aich)
