DFS share price drops: Sofa retailer issues profit warning | City A.M.

Furniture retailer DFS has issued a profit warning this morning, blaming warm weather, consumer confidence and logistical issues.

Shares in the company fell more than 10 per cent in early trading.

This was despite like-for-like order intake momentum exceeding expectations in the third quarter.

Underlying earnings for the full year are now expected to be below 2017, when the total came to £82.4m following another profit warning this time last year.

Disruption to the delivery of products from the Far East has also impacted the group this year, while weak consumer demand for big ticket purchases has continued.

Read more: The CEO of DFS is stepping down after eight years

Total like-for-like revenues are three per cent lower in the 23 weeks to 7 July than in the comparable period in the prior year.

The group also warned that the furniture market will remain challenging in the next 12 months.

But the one bright spot is the group’s acquisition of Sofology, which was cleared last year. The brand is expected to benefit earnings and help mitigate the challenging sales environment.

“The group has historically capitalised on adverse trading conditions to build our market position and we continue to believe that our cash generation and long-term growth prospects will drive attractive returns for our shareholders,” DFS said in a statement.

Read more: DFS shares bounce as it rides out the retail storm