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DFS Furniture PLC said Thursday it has seen a reduction in orders in its fourth quarter.
Shares in DFS slumped 16% in London on Thursday morning at 155.60 pence each, and have dropped 37% so far in 2022.
For its third quarter, which ended March 27, it saw double digit growth in the volume of orders versus the same period in financial 2019, which was pre-pandemic.
‘This volume growth was achieved despite offsetting significant cost inflation through mitigation and retail price increases,’ the furniture retailer said.
It added: ‘Moving into the fourth quarter the UK furniture market has seen a change in demand patterns with recent data from Barclaycard suggesting about 2.1% reduction in transactions in April relative to pre-pandemic periods. We have seen a similar change in order volumes across our group.’
DFS noted the drop in transaction volumes is despite its recent market share gains.
‘While we have increased our weekly production and delivered revenues progressively over the second half, to record levels in the fourth quarter, the ongoing Covid linked supply-chain disruption, combined with lower order intake since April has led to lower levels of production and deliveries relative to our previous expectations,’ DFS added.
For financial 2022, ending June 26, DFS is guiding for revenue between £1.15 billion and £1.16 billion - increased from £1.07 billion the year prior and up from £996.2 million in pre-pandemic financial 2019.
Looking ahead to financial 2023, DFS said its trading will be ‘resilient’.
‘It is difficult to forecast consumer behaviour over the next twelve months, but should the trends observed in April and May continue across financial 2023, this would broadly balance the volume benefit from the elevated opening order bank. Following the growth of the group in volume terms relative to pre-pandemic levels, we also believe that we have the opportunity to drive further cost efficiencies from our scale,’ DFS added.
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