DFS Furniture might be taking market share, but what about new sofa profits in 2024?!

Regular readers will know I am not a fan of shares in DFS Furniture (DFS), including observing six months ago not to expect me to buy any shares in the name (or a new sofa). Should I be excited to read that its FY23 profits are “within (its) previously guided range”, and the company “achieves record market share”?

#DFS Furniture – expects FY adj. PBT “slightly above £30m despite the market being significantly worse than expected”

#DFS Furniture – H1 adj. EPS down to 2.2p, DPS to 1.5p, notes “challenging market”

Don’t expect me to buy DFS Furniture shares (or a new sofa)

A couple of months ago, I was very downbeat (again) about the prospects for the shares of DFS Furniture (DFS) even with it describing itself as “the market leading retailer of living room and upholstered furniture in the United Kingdom”. Whilst the shares have nearly halved over the last year, as a bunch of people have realised they either cannot afford a new sofa and/or have better things to be doing with their money, the stock has pushed up over the last couple of months. What is going on?

#DFS Furniture – H1 order intake -4.8% YoY, states “profit delivery will be second half weighted” (hmmm)

DFS – I am keeping on Avoiding the shares (or buying a new sofa)

I am technically a customer of “Your Sofa & Furniture Experts”, DFS Furniture (DFS). I say technically as, whilst we did purchase the lounge sofas from the company, it was about twenty years ago and even the DFS future sales department has (sensibly) lost interest in me. After all, the sofas are still good quality and it is not as if we use them that much. However, I do follow the company’s corporate updates and share price as it provides a good insight into the thinking of the average consumer. And this brings us nicely to today’s “trading update and AGM statement” from the company.

#DFS Furniture – performance in line with FY ‘mid-case’ scenario (c.£36m PBT)

#DFS Furniture – FY adj. EPS -53%, DPS 7.4p, order volumes have “softened markedly”

DFS Furniture – trading statement, is it here comes the consumer crunch?...

Describing itself as “the UK's leading retailer of living room furniture”, DFS (DFS) has issued a trading statement including that it has “increased our weekly production and delivered revenues progressively over Half 2, to record levels in the fourth quarter… expect to close the financial year with an order bank that is elevated by c. £30m or c. 2.5% of annual revenues relative to pre-pandemic levels… The group remains in a strong financial position with significant available headroom under our £215m bank facility”. So what of a current share price response to below 165p, 11% down!?

#DFS Furniture – latest quarter reduction in order volumes

Still happy with Imperial Brands, still avoiding DFS Furniture

I was a little bit worried this morning, not because it was the Ides of March or anything like that but about how the Imperial Brands (IMB) share price might react to its announced observation of a “financial impact of an exit from Russia and the previously announced suspension of operations in Ukraine on our full-year guidance for FY22”.

#DFS Furniture – H1 adj. EPS down to 6.9p, dividend and special dividend

#DFS Furniture – H1 update, FY “scenarios… remain unchanged”

#DFS Furniture – FY adj. EPS up to 36p, DPS 7.5p, argues “well placed”

#DFS Furniture – strong recent order intake, 23 weeks of H2 to-date now +14% v. 2019 period

#DFS Furniture – emphasises “strong first half” & “order bank remains well above normal levels”

#DFS Furniture – 24 weeks gross sales +19%, showroom activities now closed in Wales, Netherlands and 'Tier 4' areas in England

DFS Furniture – Sofa Workshop, a bad case of ‘sofaeconomics’

DFS Furniture (DFS) has updated that “after careful consideration, we have decided to sell Sofa Workshop to Halo… Following the disposal, the group will benefit from the reduction in the cash costs of funding Sofa Workshop's operating losses, elimination of the potential volatility in the profitability generated and it will allow the group to focus on executing the significant value creation opportunities in its core activities”...

#DFS Furniture – agreement to sell The Sofa Workshop Limited for initial £0.3m

Still not excited by DFS and sofaeconomics

Back in mid-July I noted about the sofa stock DFS Furniture (DFS) that 'investors can do so much better than this one'. This was driven by the view that 'a world of more WFH might well be correlated with an uptick in sofa time in front of the TV, but it is not helped by higher unemployment or an enhanced difficulty in paying back those monthly charges on those oh-so-easy-to-obtain four year interest free credit deals'. Well blow me down…DFS has only gone and upped its hopes...