DFS blames the weather and shipping as it warns on profits
DFS has warned shareholders that profits will fall as the hot weather has kept shoppers away and products have not arrived from the Far East.
The group said ‘in the fourth quarter to date, exceptionally hot weather, including over key trading weekends, has led to significantly lower than expected order intake. Over the period we have also experienced disruption outside of our control to ships bringing made-to-order products from the Far East. Within the core DFS business, total like for like delivered revenues has therefore been c3% lower than last year, over the 23 weeks to 7 July 2018, and c4% lower over the 49 weeks to 7 July 2018.’
It warned that despite cutting costs profits for the full year would be below last year’s EBITDA of £82.4m.
‘We continue to expect that the furniture retail market will remain challenging over the next 12 months, given ongoing reduced consumer confidence levels, although we would expect some alleviation of current short-term demand effects.
‘Our previous investments in our supply chain and the recent acquisition of Sofology, together with progress expected at Dwell and Sofa Workshop will provide benefits to earnings that we expect to help mitigate the challenging sales environment. The group has historically capitalised on adverse trading conditions to build our market position and we continue to believe that our cash generation and long-term growth prospects will drive attractive returns for our shareholders.’