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Furniture retailer DFS has announced that it has hit its profit guidance of just over £30m for the year ended 25 June 2023.
DFS stated that it hit this target despite the market being “significantly worse than expected”.
The company’s gross margin rate continued to improve supported by freight costs returning to pre-pandemic levels and effective cost control.
However, consumer demand was impacted by the macroeconomic environment with market volumes down by around 15%-20% across FY23.
Despite this DFS still managed to hit a record market share of 38%, underpinned by the group’s “leading brands, scale and well invested integrated retail proposition”.
Looking ahead to FY24 the company expects market volumes to decline by mid single digits but the economic outlook remains uncertain.
Nonetheless, the company has stated that it expects its underlying profit for the year to be slightly above FY23.
DFS also remains confident that it can deliver its longer term goals of £1.4bn in revenue, an 8% profit before tax margin and 75% post tax free cash conversion.
Tim Stacey, chief executive, said: “I would like to take this opportunity to thank every one of our colleagues and partners for their commitment, hard work and dedication as we trade through the increasingly challenging market conditions.
“We are in the strongest position we have ever been as a group in terms of market share, and when the market recovers, we will be well placed to deliver our strategy and grow our earnings and cash flows towards our longer term plan.”
