Adairs shares lift as full-year sales beat analyst expectations
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More news: Shares in Adairs lifted in morning trade after the furniture retail group posted full-year sales that came in ahead of analyst expectations and exceeded the company’s guidance range, even though full-year profit fell.
At 10:45am AEST, shares in Adairs were up 7.4% to $2.46 but were still down 9.6% year to date.
Full-year group sales grew 6.5% to $618.1 million, ahead of the market consensus estimate of $615.6 million, according to Visible Alpha.
The Adairs business hit record sales of $442.2 million, growing 9.5% year on year, while the Mocka business saw sales lift 14.7% to $57.9 million. However, this was partially offset by Focus on Furniture which saw a 6.5% decline to $117.9 million.
Adairs full-year profit falls 17% to $26m
The news: Homewares retailer Adairs has recorded a 17.4% decline in full-year net profit to $25.7 million amid lower gross margins, a slew of investment costs and soft performance from the Focus on Furniture business.
The numbers: The result was lower than last year's $31.09 million and missed consensus estimates of $32.88 million, according to Visible Alpha data.
Full-year group sales were up 6.5% year on year to $618.1 million, topping average forecasts of $615.6 million. This was just above the company's target range of $614 million to $618 million.
Underlying earnings before interest and tax (EBIT) came in at $55.2 million, down 4.2% year on year compared to the $57.6 million posted in FY24, when Adairs' results had included an additional week. The figure is within the guidance range of $53.5 million to $57 million.
The company will pay total dividends of 4 cents per share, down from 12 cents per share last year, and below consensus estimates of 10 cents per share.
The context: Underlying EBIT removes the cost impact related to moving the office and distribution centres for the Adairs and Focus on Furniture businesses, leadership transition costs and a software-as-a-service cloud computing project, among several other costs.
Adairs and Focus on Furniture also faced lower gross margins on a weaker Australian dollar, higher supplier freight costs and increased discounting.
While the Adairs and Mocka businesses posted a 21.2% and 21.1% underlying EBIT growth respectively, this was offset by a 36.6% decline in underlying EBIT for Focus on Furniture due to "product under performance and additional promotional activity not stimulating enough incremental traffic or sales".
What they said: "Across the Group, we're sharpening our customer focus, streamlining operations, and investing in brand, product and technology innovation," Adairs managing director and group CEO Elle Roseby said.
