The upholstery retailer said the market would remain "particularly challenging" this year, citing weak consumer confidence and challenges arising from Britain's impending exit from the European Union.

Recent surveys showed consumer confidence hit a five-year low in January due to Brexit uncertainty. However, consumer morale edged up in February with British households showing stoicism.

"We note that year on year order intake in the second half of the financial year to date has been lower than the first half," said the company, which relies on the UK market for almost all of its revenue.

It also stuck to its profit expectations for the financial year, assuming no further weakening in the environment, as it tries to rein in costs.

Jefferies analysts said DFS's strategy is delivering results but it is "hard to avoid cyclical bumps". Peel Hunt analysts also backed the company's strategy.

DFS, which sells sofas, recliners and beds, said underlying core earnings rose 31.7 percent to 32.8 million pounds ($43.61 million) for the 22 weeks ended Dec. 30, bolstered by deferred purchases from the final quarter of the previous year due to the hot weather at that time and higher online sales.

Shares of the company were down 2.3 percent at 230 pence in light early trading on Thursday.

(Reporting by Pushkala Aripaka in Bengaluru)