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Investing.com - DFS Furniture plc (LSE:DFS), the UK’s leading upholstered furniture retailer, reported a significant profit increase for the 52 weeks ended June 29, 2025, with underlying profit before tax and brand amortization rising to £30.2 million from £10.5 million in the previous year, exceeding analyst expectations of £27.9 million.
The company achieved strong order intake growth of 10.2% on a like-for-like basis despite operating in what it described as a "subdued market." Revenue increased 4.4% to £1.03 billion compared to £987.1 million in the previous 53-week period, while gross margin expanded by 70 basis points to 56.5%.
"I believe that our customer proposition has never been in better shape and that all elements of our vertically integrated business model are working efficiently and effectively, leading to record net promoter scores," said Tim Stacey, Group Chief Executive Officer.
"Through focusing on what we can control and executing our strategy we have grown profits and cash flows in a weak market environment."
The company’s performance was driven by market share gains across both its DFS and Sofology brands. The DFS brand saw like-for-like order intake growth of 8.7%, while Sofology performed exceptionally well with 16.2% growth. This helped the group achieve record market share, which now stands at 39% by value.
DFS significantly strengthened its balance sheet, reducing net bank debt by £57.8 million to £107 million and improving its leverage ratio from 2.5x to 1.4x. However, as this remains outside the company’s target range of 0.5x-1.0x, the board did not recommend a dividend for the fiscal year.
Looking ahead, the company expects to grow profit in FY26 despite anticipating continued subdued market conditions. Management remains confident in achieving its medium-term targets of £1.4 billion in revenue and 8% profit before tax margins.
"Given the market share gains that we have made in the last few years, the recovery in our gross margins and the significant reduction in our cost base, despite inflation, I am optimistic about the future," Stacey added.
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