Guidance lowered at DFS as Management highlight an uncertain economic environment. Shares off 7% on the day.
Companies: DFS Furniture PLC
UK sofa retailer DFS has released a post-close trading update today, outlining the Group's poorer than expected performance so far in H2 2017.
Group revenues for the second half of the year were 4% lower than the prior year, following an increase of 7% in the first half, to deliver growth of 1% over the year as a whole. DFS now says the drop-off in footfall means profits for the year to July 29 will be at the lower end of the earlier guided range of £82-£87m.
The latest update sent shares down more than 7% in early trading and the stock is currently trading steady at down 6% on the day.
Feeling this is an industry-wide issue, the statement goes on to say:
"These figures are resulting from the uncertain economic environment and unexpected general election, exacerbated by warm weather in May and June. Our summer sale, however, started satisfactorily in July, consistent with trends we have seen in offline and online sector indicators."
Looking at consensus forecatsts, earnings per share are expected to fall 17% in 2017, as British consumers postpone larger purchases in the wake of uncertainty. DFS notes that:
"The UK furniture market is currently very challenging and revenue growth is likely to be harder to achieve in the short term than in the recent past."
