Home Money Tips for sharing Midas: Immerse yourself in DFS … Then you can sit and relax

Tips for sharing Midas: Immerse yourself in DFS … Then you can sit and relax

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Comfort zone: The commercial figures of the Sofas DFS supplier are encouraging

Are you sitting comfortably? If so, they are bad news for DFS, the sofas company that would like to spend some money to improve their experience with the ‘upholstered furniture’ in 2025.

The commercial update last week of the company was cautiously optimistic after the surprise of a declaration of results in December when the company reduced its dividend, blaming the disturbance in the Red Sea and the “low record demand of the market”.

Tim Stacey, Executive Director of DFS, says that the market is still “relatively moderate” and there are no signs of a new payment for investors, but is cushioning the blow with phrases such as “cautiously optimistic” and “attractive performance for shareholders” .

These are phrases that will probably make any current investor be entitled. They have seen their holdings fall as an excess used since 2021, when their price was 300 pence per share. To 142 pence, are less than half of the price (like some of the least popular ranges of the company now).

There have been some signs of recovery, but DFS has advanced more from here? Take a look behind the sofa cushions, where we know that all unpleasant things are hidden, should help new buyers decide.

Sofa so good

On the positive side, DFS is an important actor with more than 30 percent market share. In addition to the DFS brand, it has the associated company Sofology and has gone well thanks to brand associations with companies such as Joules and Ted Baker. While these street names have had problems, the DFS sofas that promote a similar lifestyle have proven very popular and associations now represent 45 percent of the company’s sales.

Comfort zone: The commercial figures of the Sofas DFS supplier are encouraging

The DFS strategy is simple. It allows customers to go to a warehouse to try their sofas and then manufacture most of the items at order. Offering interest without interest for up to four years means that customers with liquidity problems feel comfortable when making a new purchase.

This current commercial period (winter sales after Christmas) is possibly the most important for DFS. When we are all trapped inside the weather, we notice if our sofas look tired and there are DFS ads throughout the television, urging customers to “let their butt find their own.” The commercial report suggests that the sales period is in line with expectations, although there is a lot at stake, while the entry of orders for the first half of the year is very positive, with an increase of 10.1 percent. Analysts of the Financial Advice Platform Jefferies affirm that there has been a “marked acceleration” from the first quarter.

The company has benefited from the acquisition of its rival SCs by the Italian Potronesofef, which has closed many SCS stores for renewal reasons, which has given a boost to DFS.

In good condition

However, there are also reasons to be cautious. The company is aware of the increase in labor costs due to the increase in employers’ contributions to national insurance, while interest rates that remain higher for longer can make households concerned with spending. After all, a new sofa is usually a discretionary and not necessary purchase, which means that it is easier to cut expenses. An impulse to the real estate market could considerably raise DFS, but the recent economic events imply that recovery could be slower than expected.

Meanwhile, SCS reforms mean that the company’s main competitor could recover more strongly.

Despite all this, analysts are inclined to think that DFS is going well. Jonathan Pritchard, of the Retail Analyst Peel Hunt, says that management is being cautious in terms of interest rates, market share and consumer confidence.

However, the company has seen its market share grow faster than other retailers and Pritchard considers that there is a huge margin when the economy recovers.

“The risk is very positive for short -term forecasts,” he says. “Any additional increase in market share would further bring the perspective of returning to historical levels of profitability.”

Pritchard has an objective price of 200 pence for shares, but says that even this will seem cheap if the company continues to gain market share.

Midas verdict: Buying a sofa is not something that most of us do lightly, and it is easy to postpone it when you feel less safe about the state of your finances.

Stacey and his team cannot do much regarding the decisions taken at number 11 of Downing Street, or with respect to the state of the global economy, which can persuade many of us to keep an old and faithful sofa for a while.

As a result, it can spend some time before the results of your hard work reducing internal costs, maintaining margins and being as efficient as possible are reflected in the price of DFS shares.

However, the current commercial figures are encouraging and, for those with a long -term vision, it can be worth buying at this price and then staying still.

Negotiated in: Main market Heart: DFS Contact: dfscorporarate.co.uk/inversores

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