Furniture retailer DFS has cut its sales and profits targets for the year after demand “weakened significantly” over the past two months.

The sofa specialist also warned that profits could be knocked further if disruption to shipments through the Red Sea continues.

DFS told shareholders on Tuesday morning that demand slowed after a strong start to January.

As a result, it said, order volumes dropped 16% year on year across January and February.

The retailer said it is now on track for revenues of between £1 billion and £1.015 billion for its financial year to the end of June, cutting its previous guidance by up to £65 million.

It said profits are also now on track to be £10 million lower than previously predicted, with new guidance of £20 million to £25 million in pre-tax profits for the year.

However, it added that this is before the potential impact of further disruption to products being shipped through the Red Sea.

It said continued delays could push back a further £4 million from this year’s profits to next year.

DFS said it also remains “cautious” about consumer confidence improving and seeing a benefit in higher demand until the summer.

It came as the company revealed that revenues declined by 7.2% to £505.1 million for the six months to December 24.

Group chief executive Tim Stacey said: “I want to thank our colleagues for their dedication toward providing a first-class service to our customers.

“Whilst the current macroeconomic situation has presented many challenges, we are pleased to have extended our market leadership while reporting a resilient profit performance through the first half.”