DFS buoyed by pent-up sofa demand after showrooms reopen

DFS has revealed that sofa orders surged after it saw pent-up demand released following the reopening of its showrooms in April.

Shares in the furniture retailer soared on Thursday morning after it hailed a 92.1% jump in orders for the 10 weeks to date, compared with the same period in 2019.

It said the strong reopening period came after a third quarter which saw online sales more than triple year on year as showrooms remained shut.

DFS said revenues for the current financial year, which will finish this month, are 10.4% higher for the past 49 weeks.

It said it will therefore report underlying pre-tax profits of at least £105 million for the year, ahead of analyst forecasts.

The retailer said it will also resurrect its dividend as a result of the strong performance and is recommending a payout of 7.5p per share in September.

DFS said the sales rebound came despite significant disruption due to “supply chain challenges”, which included raw material shortages and shipping container delays following the blockage of the Suez Canal.

Group chief executive Tim Stacey said: “This performance once again reflects both the underlying resilience of the group and the tremendous support from our colleagues who have worked with huge dedication and commitment throughout the pandemic.

“Looking ahead, we will continue to invest in key strategic initiatives such as our digital channels, our showrooms and our Sofa Delivery Company final mile logistics capability, along with new investment in UK manufacturing and capacity and expansion into other home categories.

“Despite short-term supply chain challenges and a macro environment that’s hard to read, we believe the business is well set for growth, to be delivered in both a responsible and sustainable manner.”

Shares were 12.7% higher at 306.6p after early trading on Thursday.