Doncaster's DFS anticipates slow down in growth due to rising costs and Budget

The firm, which has its headquarters in Carcroft, expects its second-half profit growth for 2025 to be lower than the first half while maintaining a cautious outlook, sending the British retailer's shares down almost 3% in morning trade.

DFS estimates its first-half profits to have surged as much as 95%, partly due to gains in market share from disruptions at a competitor.

However, the company anticipates these gains to partially reverse in the second half on rising operating costs resulting from the measures implemented in the UK October 2024 budget.

The budget introduced hikes in employer social security contributions and minimum wages, which are expected to weigh down the furniture retailer's growth in the latter part of the fiscal year, it said.

"We are cautiously optimistic despite the increased inflationary pressures and less positive market outlook for 2025," CEO Tim Stacey said in a statement.

DFS said that it still expects its full-year profit to grow in line with company-compiled analysts' consensus of 22 million pounds ($26.82 million).

The furniture retailer expects profit before tax and brand amortisation for the first half to be between 16 million and 17 million pounds, compared with 8.7 million pounds a year ago.

The firm was initially established by Doncaster millionaire Lord Graham Kirkham before going on to become a nationwide chain with stores across the country.

It first began in 1969 above a snooker hall in Carcroft, trading as Northern Uphostery.