25th Aug 2020 08:56
(Alliance News) - DFS Furniture PLC on Tuesday said online and showroom trading has been strong in the past six weeks, significantly beating the living room furniture retailer's initial expectations.
Shares in DFS were up 14% at 171.60 pence in London in morning trading.
The Doncaster-headquartered company reported year-on-year order intake growth for the past six weeks, equivalent to around GBP70 million of revenue.
This puts trading "significantly ahead" of the company's initial expectations and sits alongside a solid opening order book that is expected to generate an additional in year revenue benefit of approximately GBP100 million.
"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," DFS explained.
Despite the strong start to DFS's financial year, which ends June 2021, "has started strongly" but the company acknowledged that there is still significant uncertainty relating to the impact of Covid-19 on UK consumer confidence, as well as a possible Brexit impact. This makes it "exceptionally difficult to assess the outlook beyond the short term" according to DFS.
Moreover, DFS noted that would positive trading momentum still remains, some consumers could be bringing forward spending decisions. This would hurt trading later in financial 2021.
DFS said: "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."
The company will provide another update with its financial 2020 results announcement due September 24.
By Anna Farley; [email protected]
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