Sofa retailer DFS expects sharp rise in profits amid sales growth
DFS has outlined its profit outlook for the year but pointed to the weaker backdrop caused by ongoing Brexit uncertainty.
The sofa retailer, led by chief executive Ian Filby, reported underlying gross sales growth of 7% for the 52 weeks to June 30. Online growth was particularly strong at 17%.
The company said profit before tax would rise by approximately 35% to £50m, in line with expectations.
However the group stressed it remained mindful of the risk posed by political and economy volatility, which could further impact already low consumer confidence levels.
While the short-term performance is expected to rely on the consumer backdrop, DFS has a positive long-term outlook.
"We are executing our strategy of transforming our business to lead sofa retailing in the digital age," the company said.
"We believe the market will return to historical long-term growth rates in due course.
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"As clear market leader, we are well-positioned to benefit, delivering strong levels of cash generation and attractive shareholder returns in the long term."
Analysts at Jefferies endorsed the company's strategy, saying the four DFS brands - DFS, Sofology, Swoon and Dwell - were complementary and backed by an "energy from management and the keen desire to share best practice across the brands".