After trading was on pause during the lockdown, DFS posted a £56.8m loss for the year ending 28 June.
Despite the fall in profit and a slump in revenue from £724.5 million a year earlier to £271.7m, the furniture company said that sales have been strong thanks to a pent-up demand post-lockdown.
All stores have reopened and online sales remain strong.
“We believe that this growth is due to a combination of pent up demand from lockdown, consumers spending relatively more on their homes and the strength of the DFS and Sofology propositions in particular,” said chief executive Tim Stacey.
“While the reported decline in profit is undoubtedly disappointing in headline financial terms, a significant proportion of this profit has already been recovered in the current year as we resumed customer deliveries,” he added.
The group has forecast an additional £226m of revenues for this next financial year.
Peel Hunt analyst Jonathan Pritchard said: “DFS has enjoyed another strong month of trading since the last update. Customers are continuing to trade up, a nod to the stronger ranges across the DFS group.”
The group said earlier this year that cut jobs as part of a restructuring programme.
DFS shares (LON: DFS) are trading +2.74% at 172,60 (1010GMT).