Sofa retailer DFS Furniture has returned to profit despite a “weak market environment” and soaring wage costs.
The group swung to a pre-tax profit of £32.9 million for the year to June 29 from a loss of £1.7 million the previous year as it notched up a 10.2% surge in like-for-like sales.
The turnaround came as it shrugged off a tough market and surging costs from the national insurance contributions (NICs) increase and minimum wage rise.
It said it reached its target for £50 million in annual cost savings ahead of target after delivering another £25.5 million in cuts over the financial year, helped by increased use of technology.
This offset a 2% rise in costs, including its staff wage bill.
But the group said it will keep a tight rein on costs over the year ahead “in the face of a significant increase in business rates in April 2026 and an expected further increase to the national minimum wage”.
DFS achieved a £50 million cost-cutting programme a year ahead of schedule, it said, with the group focusing on using its scale, and improved data and tech to help boost efficiency.
Tim Stacey, chief executive of DFS, said: “Through focusing on what we can control and executing our strategy we have grown profits and cash flows in a weak market environment.”
He added: “Consumer confidence is below the long-term average and inflation remains elevated but housing transactions have been recovering, consumer savings levels are relatively high and interest rates look set to fall.”
The group is expecting to grow profits further in 2025-26, but said the market was set to remain “subdued”.
