DFS Furniture has issued a trading update for the year ended 28th June 2026, in which it notes a strong performance despite softer market conditions in H2.
It says full year PBTu(A) in FY26 is expected to be around £45m, within its previously upgraded guidance of £43-50m and up some £15m YoY despite weaker market demand in H2.
Its says profit performance was underpinned by 2.7% revenue growth, gross margin expansion and continued cost discipline: "Robust free cashflow generation resulted in a reduction in net bank debt to c.£69m at 28th June (from £107m in FY25) with leverage reducing to 0.9x (1.4x in FY25).
"Continued investment in innovation across our platforms and people has achieved record customer NPS (up +7% YoY) and sustained strong colleague engagement (up +19% YoY)."
It adds that the business is well positioned to achieve its medium-term ambitions.
"Following signs of some market recovery in H1 there was a notable softening in market demand in H2," the retailer continues. "This was driven by a decline in consumer confidence and housing transactions, in part related to the Iran War.
"This softening is reflected with group H1 order intake of +2.3% YoY reducing to -4.4% YoY in H2. Full year order intake of -1.0% was broadly in line with the market. On a Yo2Y basis growth was +9.1% reflecting significant market share gains in FY25.
"Our position as the clear market leader, combined with the decisive cost actions over the past three years and the strengthening of our balance sheet has improved the business's resilience and we remain positive about the medium-term ambitions of the group."
Tim Stacey, group chief executive, says: "I would like to express my gratitude to all our talented and dedicated colleagues, whose continued commitment strengthens the DFS Group and ensures outstanding products and services for our customers.
"Through the year we have made important strategic progress across the business while also delivering a strong financial performance. We have navigated the complex and changing market environment focusing on our customer propositions combined with disciplined cost management ensuring that we delivered our upgraded profit expectations despite the market softening in the second half.
"Importantly, a strong profit performance and capital rigour has enabled us to further reduce our net bank debt and improve our leverage position, providing the group with a solid financial foundation to navigate any further market volatility.
"We remain firmly committed to our medium term ambitions of £1.4b revenue and an 8% PBT margin, and I am confident that our strategy will drive strong shareholder returns as market conditions improve."
DFS will confirm its full year results on 24th September.
