DFS, which has more than 100 stores across the UK and Ireland, warned the furniture market would continue to be tough over the next twelve months, and said revenues had fallen around 4 percent like-for-like over the 49 weeks to July 7.
"Variable cost flexibility and reductions to discretionary costs, have provided some mitigation to this recent trading environment, however we currently anticipate reporting EBITDA for the full financial year below the prior year," it said.
DFS reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of 82.4 million pounds ($108.77 million) in 2017.
Analysts had been expecting EBITDA of 84.51 million pounds for the year ending July, according to Thomson Reuters Eikon data.
The retailer said it had also suffered from disruption outside of its control in shipping deliveries of made-to-order products from Asian suppliers. Its guidance on EBITDA assumed the arrival of products before the financial year-end.
Recent surveys have shown British consumers and businesses became more pessimistic about the economy's prospects in June, suggesting Brexit worries and global trade spats may be taking their toll.
(Reporting by Noor Zainab Hussain in Bengaluru; editing by Patrick Graham)