Upholstered furniture retailer DFS has reported a growth in sales and profit.
According to its preliminary results for the 52 weeks ended 29 June 2025, total sales rose 4.4% to £1.03bn from £987.1m in 2024.
Gross margin improved from 55.8% to 56.5%, while underlying pre-tax profit resulted at £30.2m, up from £10.5m – an increase of £19.7m year-on-year.
For brand sales, DFS rose 4.2% to £1.09bn from £1,04bn, while Sofology revenues rose 12.2% to £297m from £264.8m.
DFS said that revenue was lower than the reported order intake growth of +8.7% due to investment in its interest free credit offer to drive demand in the weak market as well as the impact of Easter falling later in the year and a shift in customer orders to ranges with longer lead times. As a result, the Group ended the year with a “resilient order bank”.
The DFS brand’s like-for-like order intake growth of 8.7% was driven by new product development, while Sofology grew order intake by +16.2% as a result of a significant volume uplift with the range development and price changes made at the end of FY24 proving effective.
During the period, DFS said it had focused on developing its wider Home offering, especially in beds, building stronger relationships direct with suppliers, with a focus on both quality and improving the delivery time to its customers.
Furthermore, the company added that its recently launched partnerships with Ted Baker (FY24) and La-Z-Boy (FY25) and new ranges with existing partner brands such as the Joules Gilmorton are all performing well and its exclusive brand sales mix has reached a record high of over 40% of total DFS brand sales.
“We have established the foundations to enable future growth in the non-upholstery Home market including the roll out of a warehouse management system, the expansion of some of our exclusive upholstery brand partnerships to bed frames and consolidated supply to improve gross margins. We have recently started to invest in digital marketing to increase customer awareness of our Home proposition and we are targeting an incremental £100m of revenue in the medium term.”
On technology, with a focus on AI, DFS has begun to utilise it across a number of areas in the business. “We are utilising a CRM platform in Sofology to develop AI driven email marketing campaigns to improve personalisation of individual communications by tailoring them to the customer’s online and offline interactions,” the retailer said.
“There are early indications that this has yielded a significant conversion rate and average order value increase. In addition, we have recently published a case study with our digital creative and activation platform on the use of AI for both media effectiveness and image generation, as our work to push our digital capability continues. The advancements we are making with our media partners led to global first trials with Pinterest and a Digital Out Of Home award with JCDecaux.
“In our customer service operations we are enhancing colleague written emails by using AI to draft written responses to customer service tickets which has helped reduce resolution times and increase colleague productivity. Finally, our in-house creative production capability will continue to provide us with leading CGI (over 125,000 product images produced) and video technology across the Group, and a recent ‘Inside Out’ award nomination globally recognises our in-house creative excellence.”
DFS added that trading through the first 12 weeks of the new financial period is in line with expectations with the Board remaining “confident” in achieving its medium term £1.4bn full year revenue and 8% PBT targets.
Tim Stacey, Group Chief Executive Officer said: “I believe that our customer proposition has never been in better shape and that all elements of our vertically integrated business model are working efficiently and effectively, leading to record net promoter scores. Through focusing on what we can control and executing our strategy we have grown profits and cash flows in a weak market environment. This would not have been possible without the passion and dedication of our colleagues and I would like to sincerely thank them all for their hard work and support for our business.
“The market demand drivers for the upholstery sector remain delicately balanced. Consumer confidence remains below the long term average and inflation remains elevated but housing transactions have been recovering, consumer savings levels are relatively high and interest rates look set to fall.
“Given the market share gains that we have made in the last few years, the recovery in our gross margins and the significant reduction in our cost base, despite inflation, I am optimistic about the future. We will continue to focus on what we can control and, even in a subdued market, we expect to grow our profit before tax in FY26 and further strengthen our balance sheet. When the market recovers, we are well positioned to achieve strong growth and importantly profit and cash conversion and remain committed to achieving our medium term targets of £1.4bn revenue and 8% PBT margins.”
