** Citi says London-listed DFS Furniture's DFSD.L trading update suggests overall UK market may be incrementally more challenging from demand and cost perspective

** DFS expects 2H25 profit to be lower than 1H25, reports group order intake up 10.5% yoy for 26 weeks ending Dec. 22

** Nick Scali NCK.AX entered UK market in April 2024 after acquiring local retailer Fabb Furniture

** Brokerage retains Aussie home furnishing retailer's "buy" rating and target price A$15.31

** Citi expects Nick Scali's near-term UK performance to be driven by self-help initiatives, including refurbishments

** (UK refurbishments)...are also benefiting from Nick Scali's Australian scale which co can leverage for refurbishment pricing - Citi

** Brokerage forecasts UK business EBITDA loss of A$5.1 mln ($3.16 mln) in 1H25 and A$6.8 mln in FY25

** Nick Scali up 0.8% so far this year as of last close, lagging behind a 1.6% rise on the ASX All Ordinaries index .AORD

($1 = 1.6150 Australian dollars)

(Reporting by Nikita Maria Jino in Bengaluru)

((Nikita.Jino@thomsonreuters.com;))