Proactive Investors - Shares in DFS Furniture PLC (LON:DFSD) fell 8% in early exchanges after the furniture retailer revised its sales and profit forecasts downward due to significantly weakened demand over the last two months.
Orders fell 16% year-on-year in January and February, leading DFS to lower revenue expectations to between £1 billion and £1.015 billion for the financial year ending in June, a decrease of up to £65 million from previous estimates.
Pre-tax profits are also anticipated to be £10 million below initial forecasts, in the range of £20 million to £25 million.
This outlook doesn't account for potential further impacts from Red Sea shipping disruptions.
At 8.42 am, DFS shares were changing hands for 103.83p, down 8.97p.
Peel Hunt (LON:PEEL) rates the stock 'buy' up to 200p a share and believes the big box furniture group will turn things around - just not immediately.
“We have seen this in other places in the retail sector: there is just no consumer propensity to spend heavily on pretty much anything at the moment," the investment bank said.
"We can very much see better days ahead as interest rates start to fall and disposable income increases, but it would be foolish to forecast that happens in the immediate future.”