DFS Furniture FY profits seen ahead of current market consensus

(Sharecast News) - Upholstered furniture retailer DFS Furniture said on Tuesday that full year profits were expected to be ahead of current market consensus as strategic execution had driven "strong profit growth and cash flow" in the six months ended 28 December. DFS expects underlying pre‑tax profits for H1 to come in at £30m-31m, an increase of £13m-14m year on year, after order intake rose 2.3% across the period, with both the DFS and Sofology brands posting growth against tough comparatives and a broadly flat wider market.

Gross sales were set to be around 8.7% higher year-on-year, driven by the conversion of its elevated opening order bank and continued positive order intake trends.

DFS also highlighted that strong free cash flow had helped reduce net bank debt from £107m at the end of FY25 to roughly £60m-61m at the end of the half, with leverage improving to 0.8x on a reported basis, or 1.0x after working‑capital phasing.

While the FTSE 250-listed group stated the macroeconomic backdrop remains difficult to forecast, it now expects full‑year underlying pre‑tax profits of £43m-50m, ahead of the current £41m consensus, reflecting the strong first‑half performance and trading momentum into the second half.

Chief executive Tim Stacey said: "We have continued to make good progress growing our gross margins and managing our cost base effectively. As a result, I am pleased to report an upgrade to our full year profit expectations following a strong first half performance.

"I am confident that the business is well positioned to continue delivering against our strategy and we remain committed to achieving our medium term targets of £1.4bn revenue and 8% PBT margin and delivering attractive returns for our shareholders as the market recovers"

As of 0900 GMT, DFS shares were up 4.78% at 191.75p.

Reporting by Iain Gilbert at Sharecast.com