Adairs cuts first-half guidance as sales and margins contract
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The news: Homeware and furniture retailer Adairs has cut its first-half guidance, warning that sales growth has slowed as the company pulled back on the intensity of its promotional activity.
The numbers: Adairs has cut its first-half group sales guidance from a range of $324.5 million to $336.5 million, to between $319.5 million and $331.5 million. Its gross margin guidance has moved from 58.8%-59.6% to 59%-59.5%.
The context: Ahead of its annual general meeting this morning, Adairs told investors that first-half trading has been "largely in line" with expectations.
However, it said that sales at its core Adairs brand have moderated, and sales at its Focus on Furniture brand have slowed "despite ongoing promotional activity leading to lower than planned gross profit margin."
What they said: "Looking ahead, the next 10 weeks is the most important trading period for the half, delivering approximately 55% of sales for the half with key events like Adairs' next Linen Lover Sale Event, Black Friday, Christmas, and Boxing Day sales to come," the company said.
"The H1 result is heavily dependent on performance during these peak periods."
The source: ASX
