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DFS sees ‘improved performance’ as market share gains drive growth

DFS sees ‘improved performance’ as market share gains drive growth

DFS has reported strong trading for the first half of its financial year, driven by market share gains, cost efficiencies, and improved gross margins.

For the 26 weeks to 29 December, the furniture retailer posted a pre-tax profit of approximately £16–17m, representing a year-on-year increase of £7–8m.

DFS, which also owns the Sofology brand, recorded a 10.1% increase in group order intake, with Sofology achieving an impressive 19.1% uplift.

Gross delivered sales rose by 1.4% during the period, despite challenges such as “continued Red Sea shipping delays.”

The retailer attributed its improved performance to the successful implementation of growth initiatives, resulting in higher-than-expected market share gains across both its brands. Cost efficiencies and gross margin improvements also helped offset inflationary pressures, driving profit growth.

Looking forward, DFS expects full-year growth in both profits and cash flow, although it anticipates a cautious market in the second half of the year due to the UK’s economic performance post-Budget.

It added that operational costs are also expected to rise in the latter half due to increases in national insurance contributions, the national living wage, and higher interest rates.

Group CEO Tim Stacey said: “While the market remains relatively subdued, we are continuing to deliver on our self help initiatives having strengthened our position as the clear market leader, improved our gross margin and reduced our operating costs, all of which have helped us to deliver year on year profit growth.

“We remain focused on executing our plan, and are cautiously optimistic despite the increased inflationary pressures and less positive market outlook for 2025.

“Looking forward, we are confident that the Group is well positioned to drive attractive returns for shareholders as the market recovers and we remain focused on delivering our 8% PBT medium-term target.”

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