REG — DFS Furniture PLC — Preliminary Results

For best results when printing this announcement, please click on link below: RNS Number: 0654W DFS Furniture PLC 24 September 2026 24 September 2026 Immediate Release DFS Furniture plc Preliminary Full Year Results FY26 Strategic execution drives strong profit growth and deleveraging; customer proposition at record strength DFS Furniture plc (the "Group"), the market leading retailer of living room and upholstered furniture in the United Kingdom, today announces its full year results for the 52 weeks ended 28 June 2026 (FY26). The prior year comparative period is the 52 weeks ended 29 June 2025 (FY25). 2m), meeting upgraded guidance.

● Multi-brand resilience and Sofology outperformance: Market share at record high of 40%(4). 3% Yo2Y(1)), supported by its higher-income customer base, strategic range refreshes, and successful promotional execution. 9% order intake growth in Home (beds, mattresses, dining, living room furniture) supported by mezzanine rollout trials that provide a strong blueprint to grow our share in the £5bn adjacent Home market. 1% achieving the Group's strategic target.

● Commercialising group operating platforms: Onboarded three third-party retailers onto The Sofa Delivery Company platform during a successful 'test and learn' phase, monetising spare logistics capacity to unlock capital-light B2B revenue. ● Record customer satisfaction: All areas of our vertically integrated model are performing well contributing to record established customer net promoter scores (+7% year-on-year). ● Strong colleague engagement and cultural alignment: Colleague engagement scores increased significantly (+19% YoY), supported by the successful rollout of our new Group purpose, mission and core values. 9x.

0p total FY26 dividend). 5% year on year, in line with our expectations notwithstanding extreme weather affecting footfall and upholstery consumer demand in July and August. ● Near-Term Expectations: While cautious on the broader macroeconomic backdrop and anticipating a subdued market environment, our operational execution and disciplined cost management position us to deliver moderate profit growth in FY27 in line with analyst consensus(5). ● Significant gearing to market recovery: Core UK upholstery market volumes remain approximately 20% below pre-pandemic levels.

Given the operational leverage within the business, any top-line recovery from market normalisation is expected to deliver high profit growth, with revenue-to-profit drop-through expected at around 40%. 4bn revenue and 8% PBT margins. These ambitions are underpinned by clear structural levers: gaining share in the upholstery market and the adjacent £5bn Home market through new Sofology showrooms and mezzanine expansion, leveraging shared platforms and capitalising on future market recovery. Tim Stacey, Group Chief Executive Officer said: "The performance delivered in FY26 demonstrates the fundamental strength, agility and resilience of the DFS Group.

By maintaining disciplined cost management, improving gross margins to 58% and empowering our colleagues through data and technology, we delivered robust earnings growth and significantly strengthened our balance sheet. "Looking ahead into FY27, market uncertainty continues to influence consumer confidence and footfall, and we remain appropriately cautious regarding the broader macroeconomic environment. However, our scale, culture and technology investments - all fuelled by our new purpose and values - provide us with a clear advantage.

We remain confident in our ability to outperform the market and deliver moderate profit growth in FY27, where we are comfortable with current analyst PBT forecasts(5). 00am (UK time) today to announce the FY26 results. com Chair's statement Our financial performance has improved markedly compared to the prior year. 6% revenue growth, gross margin expansion, and a disciplined focus on cost management.

9m. Strong free cash flow generation has further strengthened the balance sheet, enabling the recommencement of dividend payments. This has not happened by accident and is testament to the long-term growth strategy that we adopted and have been executing since the end of the pandemic. The DFS Group has grown its leading market share position, has leveraged buying scale to rebuild gross margins and has delivered significant cost efficiencies across all areas of operations.

Furthermore, we have established a growing presence in adjacent Home categories. Notwithstanding the geopolitical and economic headwinds, the medium-term prospects for the upholstered furniture market remain robust. We are optimistic that our market-leading position, proven strategy, and our improved balance sheet position will ensure the business is well-placed to prosper as conditions improve. We remain focused on delivering against our long-term objectives.

Customer satisfaction and product innovation Central to our success is a compelling customer proposition. We continue to leverage the distinct and complementary strengths of the dfs and Sofology brands. Product innovation remains a key differentiator; this year, the success of our Cinesound® technology and an expanded "Home" range, supported by a high-profile brand partnership with Amanda Holden and associations with Britain's Got Talent and The Voice, has ensured our brands remain at the forefront of the consumer's mind.

Our showroom refit programme continues to deliver returns, notably at our upgraded Sofology showroom in Bolton, the blueprint for future Sofology store refits. Additionally, the introduction of mezzanines in a select number of dfs showrooms has successfully enabled us to showcase our new Home ranges to a broader audience. These physical enhancements are matched by a commitment to service; we have seen consistent growth in customer NPS ratings, driven by improvements to the omnichannel journey and excellent progress within our manufacturing and Sofa Delivery Company operations. Purpose, culture and values Our colleagues remain our most significant asset.

This year, we took the opportunity to redefine our purpose and values to ensure every team member can contribute to our collective progress. Led by a group of senior leaders from across the DFS Group, supported by the Group Leadership Team and shaped by extensive internal and external consultation, we have unified our brands under the new purpose: "Furnishing better lives, together" and developed one set of values to guide us all. This cultural evolution, reinforced by our new charity strategy, provides a strong foundation for future growth. Governance and Board structure Good governance is essential, particularly during periods of economic uncertainty.

Three years ago, we initiated a programme of Board renewal to ensure a balance of fresh skills and continuity of experience. We were pleased to welcome Dominique Highfield as CFO in May; her experience with leading consumer brands has already proven invaluable. We will continue the work to develop our Board and ensure that we have the right skills and experience going forward. Conclusion and outlook A retailer's success is defined by its people and its customers.

At DFS Group, we have built a dedicated team who are driven by our purpose and deliver a proposition highly valued by our customers. The challenges of recent years have demanded agility, skill and passion from all our colleagues; I would like to thank all of them for their continued dedication. Our business holds a unique position at the heart of British homemaking. With a strengthened balance sheet, a clear strategy, and a commitment to innovation, we look forward to the future with confidence.

0 pence. Annual General Meeting I look forward to welcoming shareholders to our Annual General Meeting, which will be held in Doncaster on 13 November 2026. This provides a great opportunity to hear from and speak with members of the Board and Group Leadership Team. Steve Johnson Chair of the Board 24 September 2026 Chief Executive's report During the year, the DFS Group made strong operational and financial progress, updated our corporate strategy and rolled out a new unified Group purpose, mission and values.

Operating against an unpredictable macroeconomic backdrop of fluctuating consumer confidence and ongoing cost pressures, we focused resolutely on what we could control. 9m. 0m, and end the period within our target leverage(3) range. 0p per share.

Our customer proposition across both our dfs and Sofology brands has never been stronger. All elements of our vertically integrated business model - design, manufacturing, retail, logistics and post-sales service - are working together efficiently and effectively, driving customer satisfaction metrics to record levels (+7% year on year). In addition, our colleague 'Your Say' survey showed a further step-change in workforce sentiment, with overall colleague engagement rising by +19% year on year, reflecting deep engagement with our new purpose and values.

While we are cautious regarding the broader trading environment and consumer discretionary spend, our momentum and improved financial foundations give us great confidence in the future growth prospects of the Group. Our updated strategy During FY26 we launched an updated DFS Group strategy focused on building our leading position in the upholstery market and capturing a larger share of the broader Home market. 4bn and achieve 8% PBT margins, we have refined our approach, structuring it around three core growth pillars: 1. Play to win in the sofa market Upholstered furniture remains the economic engine of the DFS Group.

Our goal is to protect and extend our clear leadership position in sofas by penetrating underserved customer segments and geographies, expanding exclusive brand partnerships, and sharpening the proposition, range architecture, and customer experience for both dfs and Sofology. 2. Build and scale the Home business Beyond sofas, the Home market (including beds, mattresses, dining and living room furniture) represents an addressable target market expansion opportunity of £5bn. We are beginning to leverage our scale, marketing engine and brand partnerships to capture whole-room home spend to increase customer lifetime value through higher transaction frequency.

3. Leverage and build platforms We are unlocking value across our shared enabling platforms. This includes expanding The Sofa Delivery Company as a commercial two-person logistics platform for third-party retailers by utilising spare capacity within our existing network and delivering DFS Group-wide systems simplification to replace legacy systems with a single, streamlined operating platform. By unifying our core architecture, we are removing operational complexity and consolidating ways of working across our brands to improve the end-to-end customer experience.

Strategic progress To drive our updated strategy we continue to focus on three key enablers: Leveraging our scale and vertical integration Our scale - operating with 40%(1) value share of the UK upholstery market, with sales densities over three times our nearest competitor; this scale provides us with structural advantages across the value chain. A core differentiator of our proposition is our exclusive brand portfolio within dfs. This year, we strengthened our collaborations with high profile lifestyle brands including new ranges with French Connection, Joules, Ted Baker, Country Living, and La-Z-Boy and expanded these partnerships into our growing Home category.

We also broadened our reach through a new partnership with Amanda Holden and high-visibility associations with Britain's Got Talent and The Voice. Our nationwide physical retail estate remains a vital asset and is fully integrated with our digital channels. Sofology's upgraded showroom in Bolton is performing well and serves as the blueprint for future estate refits. Across dfs we have selectively introduced dedicated Home mezzanines to showrooms to showcase our expanded bed and living room ranges.

This included installing a mezzanine at our dfs Stockton showroom and works are now underway at our Leeds Birstall showroom, due for completion early in FY27. Following these positive initial results, we have identified a strong pipeline of mezzanine opportunities to further scale our Home proposition. Underpinning these initiatives is our vertically integrated sourcing model. By combining the commercial buying teams across dfs and Sofology under unified DFS Group leadership, we are leveraging our scale to achieve significant cost of goods savings through supplier renegotiations, materials standardisation, and manufacturing optimisation.

5%), achieving our strategic target of 58%. We also optimised our operational structure to maximise internal capability and efficiency; key initiatives included streamlining our customer service operations into consolidated, specialist teams and expanding our in-house creative capabilities to produce marketing assets more cost effectively and accelerate our speed to market. We made good progress in commercialising our operational platforms. The Sofa Delivery Company, our logistics operation, is the largest two-person sofa delivery company in the UK.

It supports both of our retail brands through a shared infrastructure and provides a seven-days-a-week installation and delivery service with a strong focus on customer experience, including the removal and recycling of all packaging waste. In FY26 we onboarded three third-party retailers as part of a successful 'test and learn' phase with very positive feedback and have launched a dedicated portal to seamlessly onboard future partners. Finally, to widen our total reach to underserved customer segments, we expanded our commercial proposition introducing express ranges capable of delivery within 7-14 days to address market demand.

We see this as a good growth opportunity to unlock new customer segments and capture immediate-need purchases. Utilising data, technology and AI We view data, technology and AI as critical enablers of operational efficiency and our customer journey across the DFS Group.