(Reuters) -A profit warning from Britain’s DFS Furniture sent its shares to record lows on Wednesday reflecting subdued demand, delivery delays and higher freight costs.
It now expects a pre-tax profit, excluding brand amortisation, of 10 million to 12 million pounds ($12.8-15.3 million) and 12 million pounds for the 53 weeks ending on June 30, down from a previous forecast of 20-25 million pounds.
The company posted an underlying pre-tax profit of 30.6 million pounds last year excluding brand amortisation from continuing operations.
It said that deliveries worth 10-12 million pounds had been delayed due to disruptions to Red Sea shipping and were now expected to move into fiscal 2025.
DFS shares fell to a record low 95 pence in early trade.
Demand in the sector is down by about 10% in volume terms year on year, said the company, which operates in the UK and Ireland, said.
Earlier this year, home furnishings retailer Dunelm Group also warned Red Sea shipping disruptions would impact its second-half gross margins.
On a positive note, DFS reported its order intake had risen by more than 9% in the fourth quarter to date.
“The better volume growth in the fourth quarter offers some signs of hope that the consumer will return and with valuation low based on recovered earnings, investors should keep the faith,” analysts at Peel Hunt wrote in a note.
($1 = 0.7848 pounds)
(Reporting by Echha Jain in Bengaluru; editing by Eileen Soreng and Jason N)
