DFS profits hit by summer heatwave
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DFS
Sofa and living room furniture specialist DFS has seen annual profits cut in half after the summer heatwave hit sales.
The firm, founded in 1969, said it had experienced an “exceptional downturn” in consumer demand over summer.
Profit for the year to 28 July fell 48.5% to £25.8m, but revenues rose helped by its purchase of Sofology.
DFS expects the market to be “subdued into 2019, constrained by political risk and weak consumer sentiment”.
As well as hot weather issues, shipments of made-to-order products from the Far East were hit by delays at Felixstowe port.
The docks have been thrown into turmoil after a new terminal operating system hit problems.
This has caused delays in delivering items to customers, which is when DFS records the sale on its books.
Recovery signs?
“Financial results for the year reflected the exceptional downturn in market demand we saw in the fourth quarter,” said chief executive Ian Filby.
“We are pleased to note that the market has recovered since the start of the new financial year, with the group seeing like-for-like order growth across all brands over the first nine weeks.
“We believe, however, we are benefiting from deferred purchases in the prior financial year and overall we expect the market to remain subdued into 2019, constrained by political risk and weak consumer sentiment.”
On a brighter note, group revenue, which included income from recent purchase Sofology, rose by 14.1% to £870.5m, while online sales jumped 15.1%.
Heatwave effects
The heatwave has been cited for affecting – adversely or positively – the trading results of a number of firms and business sectors.
Clothing firm Next reported better-than-expected sales over the summer, but suit company Moss Bros blamed the hot weather for disappointing trading.
The weather also spurred people into splashing out on fans, food and drink.
However, in August food inflation jumped to a seven-month high of 1.9% after the heatwave hit crop yields.
