DFS has recorded a 5% increase in its share price, after it upgraded its full-year profit expectations for the six months to 28 December.

The upholstered furniture retailer said in its latest trading update that its financial performance in this period reflects its "market leading customer proposition", strong gross margin progression, continued cost discipline and the benefits of operating leverage.

DFS stated that its profit before tax is expected to increase by between £13m and £14m year-on-year to between £30m and £31m.

Meanwhile, its group order intake was up 2.3% year-on-year, with both the DFS and Sofology brands achieving growth against strong comparatives in a "broadly flat market".

Furthermore, its gross sales recognised on delivery of orders to customers are expected to jump 8.7% year-on-year, driven by the conversion to delivered orders of the elevated opening order bank as previous guided.

Group chief executive at DFS, Tim Stacey, said: "Our three key enablers of scale and vertical integration, utilising data and harnessing our unique culture are strengthening our market leading proposition and driving order intake across both DFS and Sofology in a broadly flat market. We have continued to make good progress growing our gross margins and managing our cost base effectively."

DFS has reported that its winter sales trading has started in line with expectations.

It is now expecting a full-year profit before tax between £43m and £50m, which is ahead of the market consensus of £41m as a result of its strong first half performance and its trading performance in the second half to date.

DFS has also reiterated its commitment to achieving medium-term targets of £1.4bn in revenue and an 8% profit before tax margin.

Investment director at AJ Bell, Russ Mould, added: "Lifting full-year guidance yet again in what remains a difficult consumer backdrop in the UK is a serious win and hints at DFS’ increasingly tight grip on the upholstery space. Improving margins show this hasn’t been achieved through heavy discounting. Crucially, the big increase in profit is being matched by a jump in cash flow which is enabling the company to pay down debt at pace.

"Having navigated its way through tough conditions, DFS will also hope the signs of life in the UK property market seen at the start of 2026 continue. A higher number of transactions should stoke demand as people look to spruce up their new homes with a sofa of their choice."

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