Having been all over place in 2018, finishing December at £1.83 having climbed from £1.94 to £2.48 in the first half of the year, DFS has gotten off to a superb start to 2019. Opening at £1.73, it quickly rocketed to an 8 month peak of £2.41 at the end of January, before stalling somewhat across February. DFS Furniture PLC now sits at a current trading price of £2.33.
The main reason for that New Year rise was January’s update. For the 5 month period to 30th December 2018, underlying gross sales were up 10% despite the ‘challenging consumer environment’, with ‘like for like order intake growth across all brands’ and a 22% increase in online gross sales.
Yet, though these figures were more than healthy, DFS said that it remains ‘cautious’ around its full year outlook, the company ‘mindful of the broader political and economic uncertainty and the further risk this may pose to consumer confidence’, alongside the potential impact on leads times for the made-to-order products it sources from overseas. It did, however, point out that the company has ‘historically capitalised on any adverse trading conditions’ to build its market position, so investors shouldn’t be too worried.
Clearly DFS is very keen to manage investors’ expectations, so it’ll be interesting to see what kind of tone the company strikes on Thursday. As for pre-tax profit, any kind of improvement on the economic anxiety and heatwave hit full year figures will be welcome.
DFS Furniture (LON:DFSD) has a consensus rating of ‘Buy’ alongside an average target price of £2.64.
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