Sofa chain DFS warns on yearly profit

L Retailer unable to cushion itself from ‘significant’ fall in store footfall

fragile consumer spending. The stock is now close to the trough hit in the immediate aftermath of the [EU] referendum last June”.

Wilson also said the firm’s full-year profits set to be lower than market expectations is “a bit of a knock after the firm gave a relatively upbeat assessment in its half-year results.”

He added that the slowdown in the second half is “not surprising when one considers the recent macro-economic data,” such as inflation growing to 2.9 per cent, “while wage growth is slowing.

“If the gap continues to widen then the likes of DFS could suffer further as spending takes a knock.

“Undoubtedly the uncertainty around the general election and Brexit means people are delaying big-ticket purchases.

“The relative resilience of the UK in the six months after the referendum, and comparative slowing thereafter, seems to be mirrored in the fortunes of DFS.”

David Madden, market analyst at CMC Markets UK, also commented.

He said: “The British consumer is being squeezed by the higher cost of living and weak wage growth, and bigger-ticket items like sofas, are in less demand.

DFS shares closed down by 20.6 per cent at 200p.