Profits and revenues at Doncaster's DFS slump as demand "weakens significantly"

Shares in the Carcroft-based firm fell sharply with the announcement that demand has slumped over the past two months, after revenues sank by 7.2 per cent to £505.1million in the six months to 24 December.

Profits are therefore likely to be £10million lower than previously predicted in 2024, DFS said, with pre-tax earnings now forecast at £20million to £25million for the year.

DFS shares were down 7.45 per cent to 104.40p in early afternoon trading on Tuesday.

DFS said order volumes had fallen 16 per cent year-on-year over January and February after a reasonable strong start to the year.

It also warned that further disruption to products being shipped through the Red Sea could potentially weigh on performance further.

Continued delays could push back a further £4million from this year's profits to next year.

Attacks by the Iran-aligned Houthi militia on ships has caused a major halt to Red Sea trade since November.

The alternative shipping route around South Africa's Cape of Good Hope can add 10-14 days to a journey compared to passage via the Red Sea and Suez Canal.

The retailer also added that it is now on track for revenues of between £1 billion and £1.015billion for its financial year to the end of June, cutting its previous guidance by up to £65million.

DFS said it also remains 'cautious' about consumer confidence improving and seeing a benefit in higher demand until the summer.

It came as the company revealed that revenues declined by 7.2 per cent to £505.1 million for the six months to 24 December.

Tim Stacey, group chief executive of DFS, said: 'I want to thank our colleagues for their dedication toward providing a first-class service to our customers.

'Whilst the current macroeconomic situation has presented many challenges, we are pleased to have extended our market leadership while reporting a resilient profit performance through the first half.'

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