(Reuters) -British furniture retailer DFS lowered its annual profit forecast on Thursday as orders for its custom-made sofas and arm chairs slipped in recent weeks due to less spending on discretionary items by customers amid a cost of living crisis.
Inflation still remains high in Britain, forcing consumers to tighten their belts, while businesses face rising costs, including on energy bills.
The company now expects profit before tax for the year to be between 30 million pounds and 35 million pounds( $36 million-$42 million), towards the lower end of its earlier forecast of 30 million pounds to 40 million pounds.
While significant cost increases have hit its profit margins, Chief Executive Officer Tim Stacey said some of those pressures were easing.
“Cost headwinds are reducing and, in some cases, reversing and we expect our upward gross margin trajectory to continue as we execute our margin build back plan”, Stacey said in a statement.
DFS said its underlying profit before tax fell to 7.1 million pounds in the six months ended Dec.
25, from 23.3 million pounds a year ago.
($1 = 0.8271 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Savio D’Souza and Emelia Sithole-Matarise)
