How Doncaster sofa firm DFS has started the post-Christmas period well

Sofa specialist DFS Furniture enjoyed a strong order intake performance across the first half of the year with the important post-Christmas trading period starting well.

The Doncaster-based firm said gross sales were up 10 per cent on the financial year 2019 comparative period with delivery throughput accelerating across the half.

However, this performance was lower than the exceptional financial year 2021 period that had benefited from significant pent-up demand post lockdown.

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Tim Stacey, chief executive of DFS Furniture, said: "I would once again like to thank all of our colleagues, who have shown tremendous spirit, resilience and commitment to our Group to deliver such a strong start to the financial year.

"While the market remains hard to predict, we believe our scale, brand strength and integrated retail strategy will allow us to drive market share gains ahead of the competition.

"Looking ahead we will continue to invest in our digital platforms and our showrooms, our delivery network, our UK manufacturing capacity, and with expansion into other home categories, we are well positioned to succeed."

Current order intake performance remains strong with the important post-Christmas trading period starting well, the firm said. It added : "The sustained performance reflects a positive customer response to our initiatives to drive higher average order values that help mitigate the inflationary trends that we continue to experience."

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DFS Furniture's order bank remains currently around £200m higher than pre-pandemic comparator levels on a revenue basis.

Gross sales, excluding its discontinued Sofa Workshop operations, increased by 10 per cent against the 26 week financial year 2019 pre-pandemic comparable period, but were 2 per cent lower than the 26 week period ended December 27, 2020.

DFS said: "Covid-related absences, supplier manufacturing capacity and logistics performance, have affected both the furniture and wider retail industry, particularly in the first quarter.

"We have however seen a strong increase in deliveries across our second quarter, with overall gross sales in the second quarter 23 per cent higher than in the first quarter.

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"Looking forward, as a result of the significant recent operational investment in The Sofa Delivery Company, combined with the additional production capacity from new manufacturing partners, we have confidence that delivery levels will continue to grow across the second half of the 2022 financial year.

"Notwithstanding the risk to delivery performance that the ongoing pandemic represents, our resilient and sizeable order bank means that any disruption experienced typically does not have a material impact on long-term profitability. This would instead cause profits to shift into a future reporting period."

The firm's expectations for full financial year 2022 profit is unchanged with performance underpinned by the current strong order bank, as well as recent trading momentum, that is expected to also generate incremental profit in the following financial year.

Manufacturing and logistics disruption remains a risk going into the second half, however, the accelerated deliveries it has seen in second quarter as well as the on-boarding of new manufacturers and its recent investment in the Sofa Delivery Company, provides the firm with confidence as it enters the second half of the financial year.

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James Mitchinson

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