The Courier & Advertiser (Fife Edition)
Disappointing results from British retailers
DFS and Dunelm issue profit warnings, while shares in online fashion retailer Asos tumble after lower than expected growth figures
A series of disappointing trading updates sent shares in some of Britain’s best known retailers tumbling yesterday.
Sofa chain DFS and home furnishing group Dunelm issued profit warnings, while online fashion retailer Asos’ increase in sales fell below expectations.
DFS said the heatwave had dented sales and shipments of made-to-order products from the Far East were hit by delays.
The retailer said it had seen “significantly” lower-than-expected orders in its fourth quarter so far, as the hot weather put off customers over key trading weekends.
DFS said total like-for-like sales in the core business were about 3% lower in the 23 weeks to July 7 and around 4% lower in the 49 weeks of the year so far.
Full-year underlying earnings were now expected to be lower than the £82.4m achieved last year.
The company said: “We continue to expect that the furniture retail market will remain challenging over the next 12 months, given ongoing reduced consumer confidence levels.”
Meanwhile, Dunelm also stated its full-year profits would fall due to weak footfall across its shops.
It said sales were down 1.4% in the 13 weeks to June 30, with total revenue coming in at £236.5m for the period.
Store sales fell 4.6% on a like-for-like basis to £179m, while online sales grew 41.8% to £30m.
The retailer expects profit before tax, before exceptional items, to be around £102 m, down from £109.3 min the previous year.
A double-digit jump in sales at Asos also disappointed investors as the online fashion firm warned its full-year growth will be at the “lower end” of market expectations. Shares in A so sf ell by 10.46% with a 680p drop to close at 5820p.
The online fashion retailer said its group revenues grew by 22% to £823.9m in the four months to June 30.
UK retail sales were up 23% to £288m, while sales in the EU rose 31% to £257.4m. In the US, sales increased 15% to £108m. Asos expects its pre-tax profit to be in line with consensus forecasts for the year.
In better news for Britain’s underpressure retailers, B&M hailed a solid start to the financial year despite “sluggish” market conditions.
The value chain’s revenue grew by 21.3% for the period between April 1 and June 30, rising from £656.3m to £796.3m.
The chain said it had opened four new B&M stores during the quarter. It is aiming to expand its estate by 50 stores by the end of the year.
Shares in DFS rose/fell by XXP to close at XXp while shares in Dunelm rose/fell by XXP to close at XXp.
We continue to expect the furniture retail market will remain challenging over the next 12 months given ongoing reduced consumer confidence levels.
DFS