Following today’s release of DFS’ figures for the 52 weeks ending 29 June 2025; Matthew Walton, senior analyst at GlobalData, a leading data and analytics company, offers his view: “DFS has rebounded from a challenging FY2023/24, which was impacted by weak consumer confidence, to record strong performance across the board and be one of the big winners in furniture in 2025 so far. Order intake recorded double digit growth throughout the year, aided by a strong Winter Sale period and strategic use of its interest free credit offer, by extending it to four years at key promotional periods. Gross sales for FY2024/25 grew by 5.8%, below order intake, as customers bought models with longer lead times and the timing of Easter meant some orders made around this key trading period could not be recognised in its FY2024/25. Gross sales rose by 10.4% during its H2 2024/25, a marked improvement from the 1.8% uplift it experienced during its first half, as the strong order book filtered through. Its second half performance is particularly strong considering it was up against +9% comparative for the final three months of its FY2023/24.
“This impressive topline performance has filtered through to its bottom line as well. Its gross margin improved by 0.7ppts as the savings it made on its cost of goods more than counterbalanced higher freight costs. Its strong sales growth and achieving its goal of finding £50m in cost savings a year ahead of target, has helped it record underlying profit before tax of £30.2m, ahead of analyst expectations for the period. These savings were achieved mainly through efficiencies in its back-office operations and last mile delivery offer, The Sofa Delivery Company, with the latter also helping to improve customer service levels through reducing potential delays in delivery.
“Sofology remained the better performing fascia, with its gross sales growing by 12.2% compared to 4.2% at DFS. This further reiterates that Sofology has found the right balance between being more price competitive, though its prices remain above DFS, while still being aspirational. Its more design-led offer also enables it to tap into the greater demand for buying into a new look. The future remains bright for Sofology as its core customer is more able to spend on big-ticket items. This will be supported by the retailer continuing to improve its store environment with stores being refurbished and plans to open a further 10-15 stores that DFS anticipates having low levels of cannibalisation. Investment in its website to improve its product visuals further will also support growth, helping to drive footfall into store during the pre-purchase stage.
“Trading during the first 12 weeks of its FY2025/26 are in line with expectations and with the group entering its FY2025/26 with a stronger order book it is off to a good start but maintaining this momentum will more challenging. Consumer confidence remains brittle in the run-up to the Autumn budget in late November which may negatively impact its pivotal pre-Christmas period. DFS will also be going against tougher comparatives from late 2025 onwards due to last year’s uplift in orders as pent-up demand was released following last year’s autumn Budget.”
