DFS Furniture PLC has released its interim results for the 26-week period ending on 24 December 2023. The company reported a resilient performance despite a challenging market environment. The gross sales for the period were £666.2m, representing a 5.6% decrease from the prior year. Revenue also decreased by 7.2% to £505.1m. However, the gross margin improved from 53.8% to 56.0%, and the underlying profit before tax increased to £8.7m, up £1.6m from the prior year.
The company highlighted its progress on the Cost to Operate program, which led to a gross margin improvement and £11.5m lower operating costs. Despite a more challenging upholstery market, DFS Furniture PLC continued to gain market share, reaching a record level of 38.5%. The company also reported continued improvement in customer NPS measures.
In terms of financial performance, the reported profit before tax was £0.9m, after deducting expected non-underlying costs of £7.1m. The group's order intake was down by 1.1% year on year, outperforming the wider market. The gross sales decreased by 5.6% year on year, and revenue from continuing operations was down by 7.2% year on year.
Looking ahead, the company provided updated guidance for the year ending 30 June 2024, with revenues expected to be in the range of £1,000m-£1,015m and profit before tax to be in the range of £20-25m. This represents a reduction in revenue guidance by £60-£65m, partially mitigated by progress on the Cost to Operate program. The company remains cautious about consumer confidence and expects market volumes to be broadly consistent with the first half of the year.
Tim Stacey, Group Chief Executive Officer, expressed confidence in the company's long-term growth strategy and its capability to deliver on objectives. Despite the challenges, DFS Furniture PLC remains well-positioned to improve profit margins and is confident in delivering its 8% profit before tax target when the market recovers.