DFS has said 2019 will be a “challenging” year, as the furniture retailer braces over the Brexit impact.
The sofa retailer said, strong like-for-like sales has grown 6.6% in the 22 weeks to 30 December, and revenue was up 29.1% to £422.3m, and earnings climbed 23.8% to £32.8m.
Tim Stacey, chief executive of DFS said, recent trading has taken a hit over consumer confidence levels, the company are expecting a “particularly challenging” 2019.
“Although identifying underlying growth rates over short-term periods is extremely difficult, we note that year-on-year order intake in the second half of the financial year to date has been lower than the first half.
“Assuming no further weakening of this environment, our profit expectations for the financial year remain unchanged.”
Border delays over Brexit could affect the retailer as more than half of their goods comes from Europe or China, any delays of their products could hit profit.
Stacey said, “While we have sought to mitigate these, their ultimate impact is uncertain and have the potential to affect our overall financial performance in the year.
“We will continue our preparations to minimise the disruption as part of our regular risk-mitigation process, until the UK and EU’s path forward is clear.”
Analysts at Peel Hunt said DFS are a strong player in a difficult market, which could benefit as rivals could buckle under the pressure.
Peel Hunt said, “Upholstery hasn’t been the easiest market to trade in for a while, but DFS is getting stronger relative to its peers.
“Indeed, it may be a while before consumer confidence improves again, who knows? But we always think of things on a slighter longer canvas and we have already seen the likes of FABB go under.
“Other retailers are struggling for credit insurance, we think, and any further shake out can only be good for DFS.”