Furniture retailer DFS blamed the recent heatwave for a big fall in orders, as it warned that profits this year would be below expectations.
Shares in DFS tumbled 10% in early trading after it told the City that earnings in the current financial year would be lower than in 2017.
While other companies have benefited from the hot weather which has brought shoppers back to the embattled high street, boosting beer, barbecue and big-screen TV sales in particular, it has damaged DFS’s business.
The group, which recently bought Sofology and also owns Dwell and Sofa Workshop, said: “In the fourth quarter to date, exceptionally hot weather, including over key trading weekends, has led to significantly lower than expected order intake.”
The company has also suffered disruption to ships bringing made-to-order products from the far east. This means like-for-like revenues are 3% down from last year over the 23 weeks to 7 July, and 4% lower over the 49 weeks to 7 July.
DFS warned that profits for the year to the end of July would fall below last year’s £82.4m on an Ebitda basis (earnings before interest, tax, depreciation and amortisation). Until today, City analysts had been forecasting a small rise in profits to £84.5m.
The company expects the furniture retail market to remain challenging over the next 12 months, pointing to weaker consumer confidence. Analysts say that big-ticket items tend to be the first things consumers cut back on when they feel the pinch.
DFS shares dropped 20p to 178.6p.