Adairs stocks plummet on 9% fall in second-half earnings guidance
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The news: Shares in small-cap furniture retailer Adairs have fallen after reporting a decline in second-half guidance for earnings before interest and tax in financial year 2025 compared to the previous year.
The numbers: At 12:46pm AEST, Adairs shares had fallen 20.5% to $2.05.
This morning Adairs announced second-half guidance for group underlying earnings before interest and tax (EBIT) of $20.5 million to $24 million, which is 9.2% lower year-on-year.
This was largely driven by a 54.7% decline in underlying EBIT guidance at the Focus on Furniture business. Guidance of the Adairs and Mocka businesses were 8.4% and 26.6% higher than the second half of financial year 2024 respectively.
Group sales guidance was up 5.7% to a range of $303.5 million to $307.5 million. Sales guidance for Adairs and Mocka businesses was up 9.2% and 15.8% respectively while for Focus on Furniture it was down 9.8%.
Overall group sales for financial year 2025 is expected to be around $614 million to $618 millio. Underlying EBIT is expected to be in the range of $53.5 million to $57 million.
The context: While sales for Focus on Furniture “remain challenging”, the business is undertaking more promotional activity although this has adversely impacted gross margins, according to a statement to the exchange.
As new and refurbished stores outperform other stores in the Focus on Furniture portfolio, management is expected to accelerate the national store roll-out program in financial year 2026.
The source: ASX
