ScS has warned that cost-of-living pressures have already driven down orders although the sofa business still lifted its profit expectations for the rest of the year.
The furniture retailer reported a 3.9 per cent increase in orders in the year to 30 July, compared with the previous year.
The company said a stronger than expected performance means it will be announcing profits ahead of market guidelines.
It had £70.8m in cash and no debt at the end of July, the group reported.
Orders spiked 16.6 per cent in the latter half of 2021 versus the previous year, reflecting a post-pandemic resurgence in sales.
However, orders were dragged down almost 10 per cent this year as in-store and online visitors began to fall in recent months.
ScS said the decrease was driven by cost-of-living pressures and economic uncertainty which had led shoppers to tighten their belts.
Low consumer confidence will continue to negatively impact sales in the 2023 financial year, the company reported.
It comes as rival sofa chain DFS also reported a shift in consumer demand in June and a fall in orders, expecting it to hit its profits.
Inflation reached a 40-year high of 9.4 per cent in June as climbing prices of food and fuel drove up the cost of living.
Reporting by Press Association, Anna Wise, PA Business Reporter.