DFS Furniture shares rise on strong trading

Shares of Doncaster-based DFS Furniture rose about 11% on Tuesday after it said its current trading is “significantly” ahead of its initial expectations.

“We have continued to trade strongly both online and in our showrooms, with year-on-year order intake growth over the last six weeks that is equivalent to c. £70m of revenues,” said DFS in a stock market trading update.

“This trading is significantly ahead of our initial expectations and is in addition to our previously announced strong opening order book that will generate a further in year revenue benefit of c.£100m.”

DFS added: “We believe that this trading performance reflects a combination of consumers currently spending more on their homes relative to other sectors, latent demand caused by the nationwide lockdown and also a strengthening advantage from our hybrid digital and physical retail offering, which is particularly relevant in this consumer environment.  

“The financial year has started strongly, however we do note that significant uncertainty related to COVID-19 on UK consumer confidence and the potential impact of Brexit exists and it is exceptionally difficult to assess the outlook beyond the short term. 

“While positive trading momentum currently remains we do note that some consumers may be bringing forward spending decisions and this may impact trading later in the financial year.  

“Notwithstanding these risks, recent trading and our current momentum does increase our earnings resilience and it has significantly strengthened our financial headroom.

“Furthermore, the board continues to have confidence that the business is well-positioned to capitalise on opportunities as its markets recover.

“We will provide a further update as part of our full-year results announcement on 24 September 2020.”