DFS has recorded a profit of £32.9m in the year to 29 June, after recording a loss of £1.7m in the previous financial year.

The furniture retailer’s gross sales increased by 5.8% to almost £1.39bn in this period, while its revenue jumped by 4.4% to £1.03bn.

DFS said that order intake growth jumped by 8.7% due to investment in its interest free credit offer to drive demand in a weak market, as well as being impacted by Easter falling later in the year.

In this period, the retailer’s underlying earnings per share increased by over 500% to 9.2 pence.

Group chief executive officer at DFS, Tim Stacey, said: "I believe that our customer proposition has never been in better shape and that all elements of our vertically integrated business model are working efficiently and effectively, leading to record net promoter scores. Through focusing on what we can control and executing our strategy we have grown profits and cash flows in a weak market environment.

"The market demand drivers for the upholstery sector remain delicately balanced. Consumer confidence remains below the long term average and inflation remains elevated but housing transactions have been recovering, consumer savings levels are relatively high and interest rates look set to fall."

DFS said that its trading in the first 12 weeks of its current financial year is in line with expectations.

It added that it is comfortable with its consensus of a profit before tax estimate of £39.4m, despite operating in a subdued market in the near team.

The firm stated that in the longer term, it is confident in achieving its medium-term target of £1.4bn in revenue and 8% profit before tax targets.

Investment director at AJ Bell, Russ Mould, said that DFS returning to profit and growth is "no mean feat".

He concluded: "What will give investors further comfort is the significant cash flow generated in the period, which has enabled the company to pay down debt, and the substantial increase in order intake.

"The company is leveraging its strong market position and initiatives like investing in product innovation and utilising brand partnerships appear to be paying off. The company’s ability to handle delivery itself also represents an edge over some of its rivals.

"Even in a tough economic environment people will still have some appetite to refresh their living spaces and replace worn furniture and DFS needs to make sure it gets the basics right – having the right products in the right places and the right price points to get the tills ringing."

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