DFS Furniture, the UK's largest upholstered furniture retailer, said underlying profit before tax and brand amortisation for the 52 weeks to 28 June is expected to be around £45m.
That falls within its previously upgraded guidance range of £43m to £50m and marks an increase of around £15m year-on-year.
The group said profit was underpinned by 2.7% revenue growth, gross margin expansion and continued cost discipline, even as market demand softened in the second half.
Net bank debt fell to around £69m at the year-end, down from £107m in FY25, with leverage easing to 0.9 times from 1.4 times, reflecting strong free cash flow generation.
DFS said the market recovery seen in the first half gave way to a "notable softening" in demand during the second half, which it linked to declining consumer confidence and housing transactions, partly tied to the Iran war.
Customer net promoter scores rose 7% year-on-year and colleague engagement climbed 19%, the group said.
"A strong profit performance and capital rigour has enabled us to further reduce our net bank debt and improve our leverage position, providing the Group with a solid financial foundation to navigate any further market volatility," said Tim Stacey, Group Chief Executive.
DFS will report full-year results on 24 September.
