Adairs has reported a 5.9 per cent increase in sales, reaching $328 million for the first half of the financial year. However, net profit experienced a significant decline due to technology upgrades and other associated costs. The group’s sales figures aligned with its revised half-year expectations, which ranged from $319.5 million to $331.5 million.
Underlying earnings before interest and tax (EBIT) saw a 9.1 per cent decrease, settling at $30 million. This downturn subsequently impacted net profit, which fell by 33.8 per cent to $12.8 million for the 26-week period ending December 28. Adairs is a homewares and furniture retailer operating across Australia and New Zealand. The company provides a wide range of products, including bedding, furniture, and home decor items.
Gross margins were affected by clearance activities at Adairs, although this was partially offset by improved margin management at Mocka and Focus on Furniture. All brands faced challenges from a weaker Australian dollar, and the retailer also contended with increased business expenses. Mocka demonstrated strong performance, achieving double-digit growth in both sales and earnings. Looking ahead, Adairs anticipates building on the momentum from the second quarter, projecting growth in sales, margins, and underlying EBIT for the second half.
During the first seven weeks of the second half, the group reported sales growth of 6.4 per cent. An interim dividend of 5.5¢ per share was declared, scheduled for payment on April 7, which is lower than the 6.5¢ per share declared a year prior. Mocka’s inaugural standalone store is set to open in Queensland in May, while Adairs plans to introduce three to four new stores, including a ‘new concept store’ at Bondi Junction. Focus on Furniture will also expand with one new outlet.
