DFS Furniture’s sales drop by 27% as COVID-19 shuts stores in recent months

DFS Furniture’s sales drop by 27% as COVID-19 shuts stores in recent months
Written by:
Wajeeh Khan
14th July, 09:48
  • DFS Furniture’s sales drop by 27% as COVID-19 shuts stores in recent months.
  • The British furniture retailer reports a 77% increase in online orders.
  • The Doncaster-based company remains cautious on its future guidance.
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DFS Furniture (LON: DFS) said on Tuesday that its annual sales came in 27% lower due to the Coronavirus lockdown in recent months. As the government started easing restrictions in late May and allowed businesses to reopen for the public, however, DFS said orders recovered quickly in June. COVID-19 restrictions, on the other hand, resulted in an increase in H1 sales of the British online supermarket, Ocado Group.

Shares of the company opened about 3% down on Tuesday but recovered completely on market open. At 158 pence per share, DFS Furniture is currently 45% down year to date in the stock market after recovering from an even lower 110 pence per share in March. Learn more about stock market volatility.

DFS Furniture reports a 77% increase in online orders

The British retailer was pushed into temporarily shutting down its stores in March when the government announced a strict countrywide lockdown to minimise the fast spread of the novel flu-like virus. Resulting in a delay in deliveries, DFS took a massive hit to its sales in recent months. Consequently, it resorted to slashing costs to shore up finances amidst COVID-19. Here’s how the furniture retailer optimises conversion via staff scheduling.

In the year that ended in late June, the upholstery retailer said, its revenue came in at £271 million as compared to a much higher £725 million in the previous year.

From 23rd March to 12th July, however, DFS saw a 77% increase on an annualised basis in online orders that it attributed to the strict social distancing measures. It also highlighted on Tuesday that it had resumed operations at its showrooms in compliance with the safety measures laid out by the health authorities that resulted in a 69% year over year increase in new orders in the six weeks that started on 1st June and ended on 12th July.

DFS Furniture remains cautious on its future guidance

According to Peel Hunt, the Doncaster-based company is doing good at a time when several of its competitors are struggling to combat the impact of COVID-19. DFS expressed confidence in the strength of its order book that is likely to result in a roughly £100 million of incremental revenue benefit in fiscal 2021. Still, the company remained cautious on its future guidance.

DFS Furniture performed largely upbeat in the stock market last year with an annual gain of more than 50%. At the time of writing, the furniture retailer that has operations in the UK, Netherlands, Spain, and Ireland, is valued at £402.45 million and has a price to earnings ratio of 17.32.

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