By Michael Susin
DFS Furniture reported a sharp fall in pretax profit for fiscal 2023 as customers avoid spending on big-ticket items such as furniture, dragging the sector value below prepandemic levels, and cut its dividend payout.
The U.K. furniture retailer said Tuesday that pretax profit for the year ended June 25 fell to 29.7 million pounds ($36.3 million) from GBP58.5 million reported in fiscal 2022. Revenue fell to GBP1.09 billion from GBP1.15 billion.
However, gross margin increased to 54.4% from 52.7%.
“The group is operating in one of the toughest economic climates we have experienced. Whilst we are confident the upholstery market will recover, forecasting the specific timing and pace of the recovery is challenging,” Chief Executive Tim Stacey said.
The company said the upholstered furniture market value was 15% behind prepandemic levels due to the challenging macroeconomic backdrop. For fiscal 2024, the group expects a market decline in the mid-single digits.
Despite the weak economic backdrop, the group reached a record market share of around 38% after 2 percentage-point growth on year.
Looking ahead, the group expects underlying pretax profit for fiscal 2024 to improve by a low-single digit to between GBP30 million and GBP35 million, supported by continued market-share gains and margin improvements.
“We are confident the market will recover, however we can’t predict how quickly that will happen,” the company said
The board has recommended a final dividend of 3.0 pence a share, bringing the total dividend for the year to 4.5 pence. This compares with 7.4 pence a share paid a year ago.
Write to Michael Susin at [email protected]
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