DFS has announced its preliminary results for the 48 weeks ended 30th June 2019 (its 50th year of trading). The date was previously 31st July, making it a shorter accounting period than usual (although unaudited pro-forma figures have been used for the YoY comparisons reported).
The retailer reports good trading performance with all brands and channels achieving LFL gross sales growth. Underlying profit before tax (excluding brand amortisation) was up +31.1% YoY.
Thanks to its refreshed strategy reported in March, DFS' core business saw a return to LFL growth, driven by +16.2% growth in online sales, while Sofology saw +14.4% pro-forma sales growth and "significant YoY profit improvement", opening one new showroom, in Plymouth. Dwell and Sofa Workshop achieved pro-forma gross sales growth of +17.4% on a combined basis.
The group says it made good digital progress during the period, with greater shared use of logistics, manufacturing and property assets also under way.
Group CEO Tim Stacey comments: “Our trading performance for the last financial year was good overall, as we continue to execute our new strategy to lead sofa retailing in the digital age. LFL growth across all brands and all channels, especially online and in Sofology, has enabled us to grow our market share, and as we celebrate DFS’ 50th anniversary, we believe that our group is well positioned for the long-term.
"Recent trading conditions have reflected the increasingly uncertain political and economic backdrop and we have seen reduced levels of footfall across all our brands, which we attribute to lower levels of consumer confidence and housing transactions, the two key drivers of the upholstery market. Although we have had some success in driving conversion to mitigate this trend, we note that over the first 12 weeks of the financial year order intake levels have been subdued.
"Our financial performance in the remainder of the first half, and the whole financial year ahead, will inevitably be dependent on broader political and economic developments and at this stage it is difficult to predict what will happen specifically within the upholstery market. However, we remain focused on those variables that we can control and on executing our strategy, which we believe puts us in a strong position in the market over the long-term.”