DFS reports "good strategic progress and profit in line with expectations" for the year to 30th June 2019, with underlying group gross sales growth of +7% (adjusted to include the Sofology acquisition). The retailer saw LFL gross sales growth across all brands, with strong online growth of +17%.
Underlying profit before tax is expected to be slightly above £50m (up from £38.3m in the previous year), in line with expectations. Every group brand recorded YoY LFL gross sales growth for the 26 weeks to 30th June, in part assisted by weak comparatives.
The statement reads: "Despite a solid trading performance, we remain mindful of the risk that the volatile political and economic backdrop may further impact on already low consumer confidence levels. Our progress in the near-term will inevitably be somewhat dependent on this backdrop. In addition, as previously noted, the first half of our 2018/2019 financial year benefited from additional demand from purchases deferred from earlier periods.
"Whilst weak trading environments make it harder to achieve significant levels of revenue growth, our omnichannel consumer offer, showroom sales densities, scale of operations and portfolio of well-recognised brands provide some resilience. We also believe that we can continue to drive profit benefits and synergies from our previous capital investments and acquisitions.
"We are executing our strategy of transforming our business to lead sofa retailing in the digital age. We believe the market will return to historical long-term growth rates in due course and that as clear market leader we are well-positioned to benefit, delivering strong levels of cash generation and attractive shareholder returns in the long term."
In other news, Mike Schmidt (formerly DFS' interim CFO) has been appointed its CFO and an executive director. Prior to his appointment as interim CFO, Mike served as DFS' CDO, and led the acquisition of Sofology in 2017. More recently he has served as chair of Sofa Workshop and Dwell. Prior to joining DFS, Mike spent 13 years working for a number of investment banks including UBS and Citi.
