DFS Furniture (DFS) AI Stock Analysis

• Market Cap: £316.97M
• Dividend Yield: 2.98%
• Average Volume (3M): 393.90K
• Price to Earnings (P/E): 48.9
• Beta (1Y): 0.36
• Revenue Growth: -6.00%
• EPS Growth: -69.78%
• Country: UK
• Employees: 4,522
• Sector: Consumer Cyclical
• Sector Strength: 49
• Industry: Home and Homeware
• EPS (TTM): 0.03
• Shares Outstanding: 234,144,420
• 10 Day Avg. Volume: 786,111
• 30 Day Avg. Volume: 393,904
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.33
• Price to Cash Flow (P/CF): 1.50
• P/FCF Ratio: 1.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 211.50p
• Price Target Upside: 53.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

DFS Furniture's stock score reflects a mix of financial challenges and positive strategic moves. The company's high leverage and declining revenue are key risks, but strong cash flow and recent corporate events, including profit growth and strategic appointments, provide a positive outlook. The overvaluation of the stock is a concern, suggesting caution unless growth expectations are met.

Positive Factors

Financial Performance

DFS Furniture marked an impressive recovery in profit, continuing strong trading trends.

Future Expectations

Strong first half results support a significant upgrade to future expectations.

Market Position

The company has increased its market share, particularly benefiting from the disruption faced by a competitor.

Negative Factors

Revenue Trajectory

Set against more than two years of declining market volumes that have resulted in DFS' negative revenue trajectory.

DFS Furniture Business Overview & Revenue Model

Company Description

DFS Furniture (DFS) is a leading furniture retailer in the United Kingdom, specializing in sofas and upholstered furniture. With a strong presence across the UK and Ireland, DFS offers a wide range of high-quality, custom-made furniture designed to suit various tastes and budgets. The company operates through a network of retail stores and an online platform, providing customers with access to its diverse product lines and exceptional customer service.

How the Company Makes Money

DFS Furniture generates its revenue primarily through the sale of furniture products, including sofas, chairs, and entire living room sets. The company operates a direct-to-consumer model, selling its products through its extensive retail store network and online channels. Key revenue streams include the sales of custom-made furniture, accessories, and related home furnishings. Additionally, DFS benefits from offering financing options to its customers, which can increase the affordability and attractiveness of its products. Strategic partnerships with suppliers and manufacturers enable DFS to maintain competitive pricing while ensuring high-quality offerings. Seasonal sales, promotions, and an emphasis on customer service also contribute to its earnings by driving foot traffic and online engagement.

DFS Furniture Financial Statement Overview

Summary

DFS Furniture shows a mixed financial performance with declining revenue and profitability challenges, as indicated by a negative net profit margin. Despite a stable gross profit margin, high leverage poses risks, although strong operational cash generation offers some resilience.

Income Statement

DFS Furniture has shown a declining revenue trend, with a 9.4% decrease from 2023 to 2024. The company also experienced a negative net profit margin due to a net loss in 2024, reflecting profitability challenges. However, the gross profit margin remained relatively stable, indicating some control over production costs.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage, which can be risky in times of economic downturns. The equity ratio stands at 21.9%, suggesting limited equity relative to assets. Return on equity has turned negative, reflecting the net loss.

Cash Flow

Operating cash flow remains strong, surpassing net income, indicating good cash generation from core operations. Free cash flow has grown by 23.3% from 2023 to 2024, which is a positive sign. However, the high leverage could strain future cash flows.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
987.10M	1.09B	1.15B	1.06B	724.50M
	Gross Profit
550.80M	500.10M	517.70M	513.50M	325.30M
	EBIT
41.30M	63.80M	87.00M	137.80M	-50.50M
	EBITDA
131.10M	156.00M	175.20M	218.70M	45.10M
	Net Income Common Stockholders
-4.40M	26.20M	31.40M	88.70M	-69.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
26.80M	26.70M	17.30M	22.70M	62.30M
	Total Assets
1.05B	1.06B	1.12B	1.10B	1.17B
	Total Debt
591.70M	577.20M	551.20M	493.90M	735.90M
	Net Debt
564.90M	550.50M	533.90M	471.20M	673.60M
	Total Liabilities
817.50M	822.10M	851.00M	820.30M	969.70M
	Stockholders Equity
229.00M	237.10M	268.90M	284.50M	201.90M
Cash Flow		Free Cash Flow
94.30M	76.50M	81.70M	243.70M	23.40M
	Operating Cash Flow
115.90M	111.40M	129.10M	292.90M	46.80M
	Investing Cash Flow
-19.80M	-33.60M	-45.60M	-47.40M	-22.00M
	Financing Cash Flow
-98.60M	-56.10M	-84.50M	-301.80M	7.70M

DFS Furniture Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 137.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DFS, the sentiment is Negative. The current price of 137.4 is above the 20-day moving average (MA) of 137.20, below the 50-day MA of 137.69, and above the 200-day MA of 129.22, indicating a neutral trend. The MACD of 0.68 indicates Negative momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 52.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:DFS.

DFS Furniture Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HFD	68 Neutral	£269.44M	19.31	5.18%	6.45%	-0.79%	-45.22%
Sector *	59 Neutral	$12.37B	11.05	1.62%	3.72%	1.33%	-19.92%
BWY	59 Neutral	£2.77B	21.25	3.77%	2.31%	-30.13%	-63.13%
DFS	58 Neutral	£316.97M	48.90	2.72%	2.98%	-6.00%	-69.78%

DFS Furniture Corporate Events

DFS Furniture Reports Strong Interim Results with Profit Growth

DFS Furniture plc reported strong interim results for the first half of FY25, with a 10.1% year-on-year increase in order intake despite a subdued market. The company’s strategic focus on customer service, product innovation, and cost control led to a significant rise in underlying profit before tax, which nearly doubled to £17.0 million. The company also reported improved gross margins and a reduction in net bank debt, positioning it well for future growth. With continued strong trading and cost management, DFS expects to outperform market expectations for the full year, reinforcing its confidence in achieving its medium-term financial targets.

DFS Furniture Strengthens Board with New Appointment

DFS Furniture plc has appointed Tony Buffin as an Independent Non-Executive Director, effective February 24, 2025. Buffin, who serves as Chair of Nobia AB and is a Non-Executive Director at Applied Nutrition, brings significant retail experience that aligns with DFS’s growth strategy. His addition to the board is part of DFS’s continued efforts to accelerate growth and expand its home offerings. This strategic appointment is expected to enhance DFS’s market positioning and operational strategy, potentially impacting stakeholders positively.

DFS Furniture Enhances Financial Strategy with New Joint Corporate Broker Appointment

DFS Furniture plc has announced the appointment of Panmure Liberum Limited as a joint corporate broker, alongside Peel Hunt LLP, effective immediately. This strategic move could enhance the company’s financial operations and potentially improve its market positioning, offering new opportunities for stakeholder engagement.

DFS Furniture PLC Announces Change in Shareholder Voting Rights

DFS Furniture PLC has announced a change in its shareholder voting rights, following an acquisition or disposal by The Wellcome Trust Limited. The transaction resulted in The Wellcome Trust holding a 3.0817% voting stake in the company, which may influence future decisions and company strategies as stakeholders adjust to this new ownership distribution.

DFS Furniture Announces Change in Major Shareholding

The announcement from DFS Furniture Plc details a significant change in shareholding, with Perpetual Limited, based in Sydney, Australia, acquiring a 10.038% stake in the company. This increase in voting rights from a previous 9.768% may influence DFS Furniture’s future decision-making and strategic direction, potentially affecting its market positioning and stakeholder interests.

DFS Furniture Appoints Marie Wall as Interim CFO

DFS Furniture plc has announced the appointment of Marie Wall as the Interim Chief Financial Officer and executive director, effective January 20, 2025. Marie Wall brings considerable experience from senior finance roles in major companies, enhancing DFS’s leadership as it continues to dominate the UK furniture retail market. This leadership change is part of DFS’s ongoing focus on strengthening its executive team and maintaining its market-leading position.

DFS Furniture Reports Strong H1 Performance Amid Market Challenges

DFS Furniture plc has reported a significant improvement in its financial performance for the first half of the fiscal year, driven by increased market share, reduced operating costs, and improved gross margins. The company expects a year-on-year increase in profits, with H1 Group profit before tax projected to rise by £7-8 million, and a 10.1% increase in Group order intake. Despite a challenging market environment, DFS has successfully implemented growth initiatives, leading to higher sales and a decrease in net bank debt. The outlook remains cautiously optimistic, although the second half of the year may face challenges due to economic conditions and operational cost increases.

DFS Furniture Reports Adjustment in Major Shareholder Voting Rights

DFS Furniture Plc announced a change in major holdings as Perpetual Limited, based in Sydney, Australia, adjusted its voting rights in the company from a prior position of 10.023% to a new level of 9.768%. This adjustment in voting rights reflects a slight decrease in Perpetual Limited’s stake in DFS Furniture, which may influence the company’s decision-making processes and shareholder dynamics.

Aviva Reduces Stake in DFS Furniture PLC

Aviva PLC has made a notification regarding a change in its voting rights in DFS Furniture PLC, moving from above 5% to below 5%. This change reflects a decrease in Aviva’s combined interest level in DFS, impacting its influence and decision-making power within the company, which may have implications for the company’s governance and investor relations.

Aviva PLC Adjusts Holdings in DFS Furniture

Aviva PLC has notified DFS Furniture PLC about a change in the nature of its holdings, specifically the return of loaned shares, which resulted in a slight adjustment in the percentage of voting rights held. This change marks a shift from less than 5% to exactly 5% of voting rights, maintaining their influence in the company’s voting structure.

DFS Furniture Sees Shift in Shareholder Voting Rights

DFS Furniture PLC has experienced a notable change in shareholder voting rights, as Aviva PLC has reduced its holdings from over 6% to 5.02%, crossing a significant threshold. This shift in voting rights may impact DFS’s shareholder dynamics and influence corporate decision-making, reflecting broader trends in shareholder engagement and investment strategies within the furniture retail sector.