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Tag: Adairs

  • Adairs Lifts FY26 Revenue to $641.7 Million Despite Furniture Slump

    Adairs Lifts FY26 Revenue to $641.7 Million Despite Furniture Slump

    Adairs Limited lifted group revenue 3.8 per cent to $641.7 million in FY26 as solid sales at its core homewares brand and Mocka offset a furniture slump.

    Underlying net profit after tax rose to $34.6 million, though non-cash impairment charges dragged the Australian retailer to a statutory net loss of $39.4 million.

    The flagship Adairs banner drove the performance. Sales grew 3.9 per cent to $459.2 million, lifting underlying earnings before interest and tax 14.9 per cent to $41.1 million. Gross margin reached 60.9 per cent, while EBIT margin widened 90 basis points to 9 per cent.

    Mocka expanded at a faster clip. Revenue jumped 22.9 per cent to $71.2 million and underlying EBIT climbed 32.1 per cent to $10.1 million, supported by catalogue expansion and pricing adjustments. The brand also opened physical trial stores in June.

    Supply snags hit furniture earnings

    Focus on Furniture weighed on group returns. Sales dropped 5.6 per cent to $111.3 million and underlying EBIT plunged 67.6 per cent after a third-quarter leadership transition disrupted inventory purchasing, thinned showroom floor stock and stretched customer delivery timelines.

    The group installed a new divisional chief executive and restarted supplier ordering in April and May. Inbound stock shipments are scheduled to rebuild availability through the second quarter of FY27, with fresh furniture collections arriving from October.

    Store network plans and debt reduction

    Discretionary retailers across Australasia continue to grapple with uneven consumer sentiment by tightening supply chains and defending gross margins. Adairs countered the furniture drag by trimming net debt by $20 million to $47.6 million, funding a 9.5 per cent increase in full-year dividends to 11.5 cents per share.

    Network changes will remain selective in the year ahead. The group plans to open seven to 10 stores, refurbish four to six, and shut between two and five underperforming sites, while Focus on Furniture will focus on relocations rather than adding new stores before earnings recover across FY28.

  • Adairs acquires online-only homewares brand

    Adairs acquires online-only homewares brand

    Adairs has entered into a binding agreement to acquire pure-play homewares retailer Mocka for approximately $80 million.

    Mocka operates across Australia and New Zealand and will continue to run as an independent business with the existing management team leading its operations and strategy.

    All product design, development, sourcing, and marketing is done in house across two teams operating out of Brisbane and Christchurch.

    The acquisition is to be funded through Adairs’ group term debt facilities, as well as the issuing of 3.2 million ordinary shares to Mocka, and is expected to be completed in mid-December.

    The new shares issued will be escrowed to until the release of Adairs’ FY21 results, while the total amount will be paid over the next two to three years.

    According to Adairs chief executive Mark Ronan, the acquisition will be highly complementary to the homewares retailer.

    “We have shared DNA in that we are both design-centric with in-house product design and development which allows us to offer our customers high quality ‘design-led, value for money’ differentiated product,” Ronan said.

    “Importantly, this also means we have significant control of the vertical supply chain and in-market pricing. Finally, we are each highly customer-centric organization, with a passion for great service.”

    Ronan also said the acquisition gives Adairs a stronger foothold in the online space – with online sales growth for 17 percent of the business to almost 30 percent with the acquisition.

    “We see many opportunities for Adairs to add value to an already successful business,” Ronan said.

    “Our knowledge and experience of the home market will allow us to help management further develop the Mocka brand, especially in Australia, and support the Mocka team to continue to deliver growth.”

    Adairs also offered revised guidance for the business into FY20, taking into account how the addition of Mocka will affect sales and EBIT for the year.

    Sales are expected to reach $419 to $435 million over the course of FY20, while earnings before interest and tax is expected to hit between $54.5 and $58.7 million.

    This compares to the retailer’s initial guidance given for FY20 of between $377.7 to $393.4 million, and an EBIT of between $45 and $48 million.

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  • Adairs finally delivers first profit in New Zealand

    Adairs finally delivers first profit in New Zealand

    Homewares business Adairs delivered its first profitable year in New Zealand in FY19, with work done on the local supply chain significantly assisting sales, along with improving brand awareness.

    New Zealand saw sales growth of over 25 percent during FY20.

    According to Adairs chief executive and managing director Mark Ronan, the lessons learned in New Zealand will assist the business as it looks to expand into further markets – when the right opportunity arises.

    On a group level, Adairs saw net profit slip despite sales and gross profit improving as a result of a weaker Australian dollar and the costs of a growing distribution network over the year to 30 June, 2019.

    Total sales increased 9.7 percent to A$344.4 million ($365.2 million), with Adairs’ online channel growing 41.7 percent during the year – now contributing 17 percent of overall sales.

    Despite relatively strong sales numbers, Adairs net profit fell 1.3 percent to A$29.6 million ($31.39 million).

    Ronan said the group results were attributed to an unrelenting focus on delivering excellent retail execution, and an understanding of what the business’ customers want both online and offline.

    Part of this understanding comes from the business’ loyalty offering, Linen Lovers, which grew 17 percent over the year. Linen Lovers members contributed 75 percent of all sales.

    According to Ronan, Adairs is not quite operating at best-practice in its omnichannel operations, which gives the business a lot of room for growth in the online space.

    Cost of doing business grew by A$15.2 million ($16.12 million) (, or 11 percent, due to efforts to restructure the business’ supply chain network in order to provide agile, the best-in-class capability to accommodate future demand.

    “We are addressing our short-term supply chain issues and have a clear process to finalize the long term solution,” Ronan said.

    “We see this as an opportunity to contribute to building and sustaining our competitive advantage. In the last 12 months, we have made strategic hires in key areas of our business, [and] we are in a strong position to deliver a great retail experience.”

    However, Ronan acknowledges that the current retail climate brings its own set of challenges.

    “While the macro environment is challenging, our strategies of product differentiation, range expansion, more inspiring and larger store formats, and an unwavering focus on customer service will all play a key role in growing both like-for-like and total sales in FY20,” Ronan said.

    During FY20, Adairs expects to open between four to six new stores across Australia and New Zealand, and forecasts total sales of between A$360 million and A$375 million ($381 million and $397.7 million) to deliver an EBIT of between A$43 million and A$46 million ($45.6 million and $48.79 million).

  • Adairs Profit Down

    Adairs Profit Down

    Adairs shares have lost more than 30 percent after the homewares and manchester retailer issued another earnings downgrade, citing supply chain challenges. The company announced on Friday it had observed “an adverse change” in trading momentum since the end of May, with sales growth completely flat over the first three weeks of June.

    Adairs chief executive Mark Ronan said the performance marked a material reduction from the 9.0 percent like-for-like sales growth recorded up until May 27.

    The company said it was, therefore, revising its FY19 earnings guidance of $46 million to $50 million – itself flagged as a downgrade at February’s half-year results – to between $42.5 million and $44 million.

    Its FY19 sales guidance has also been narrowed from between $340 million and $355 million to between $340 million and $345 million.

    Shares in Adairs closed 31.32 percent, or 57 cents, lower on Friday at a near two-year low of $1.25.

    Ronan admitted the update was disappointing but insisted the company was still healthy and growing.

    “We have specific issues to address to improve our supply chain capacity, productivity, and efficiency,” Ronan said.

    Ronan said he expected full-year like-for-like sales growth to be between 7.0 percent and 8.0 percent, which he said was in line with the company’s long-term targets.

    He said online sales had grown 40 percent in the second half to date and will represent 17 percent of total sales for the year.

    In February, the company reported a first-half profit increase of 6.83 percent to $14.89 million, following a period of significant online growth.

    But the company moderated its full-year earnings guidance as it braced for the impact of a depreciating Australian dollar “and a potentially more challenging consumer environment”.

    Adairs shares have fallen 33.51 percent so far in 2019.

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  • Adairs on track for record results

    Adairs on track for record results

    Bedding retailer Adairs says its on track to book record sales and earnings in fiscal 18, upgrading its guidance for the second time in as many months on better than expected third quarter trading.

    Adairs said on Thursday that strong demand for its autumn and winter range had underpinned an 18 per cent increase in year-to-date like-for-like sales growth, bringing financial year-to-date LFL growth to 16 per cent.

    It now expects earnings for fiscal 18 to come in between $44 – 46.5 million, up from the $40 – 44 million upgraded guidance it provided in February.

    Sales are now expected to be between $310 – $315 million, up from the $300 – $310 million forecasted in February.

    “This further upgrade to our FY18 earnings guidance reflects both the continued higher sales performance observed the last two months and our confidence in the momentum we carry into the remainder of this financial year,” chief executive Mark Ronan said.

    The update is the latest of a string of solid trading periods for the business after it embarked on a shift in its strategy last year by reworking its range and tightening its promotions.

    Online sales have been a bright spot for the business so far this year, with sales up 99 per cent to around 12.8 per cent of total revenue.

    Ronan said Adair’s full year result will represent a significant improvement over the prior year, when the business was weighed down by a particularly bad first-half.

    “Our FY18 result will be underpinned by a significant rebound in performance, the capacity of our strategy to grow market share profitably and the effectiveness of our omni channel strategy. Further, we believe the FY18 result will provide a solid platform for continued growth into FY19,” he said.

    Adairs also tightened its gross margin guidance on Thursday from its previous 59.5 – 61.5 per cent range to 60 – 61 per cent.

    Capital Investment forecasts were revised downward from $9 – $11 million to $7 – $9 million.

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  • Adairs continues with international expansion plans

    Adairs continues with international expansion plans

    Bedding retailer, Adairs, announced it will continue its international expansion next year and will roll out new stores in New Zealand and launch an international website.

    Mark Ronan, managing director and CEO, stated after the successful opening of their store in New Zealand, the company is looking into opening up to two additional stores in the country.

    Ronan said the company is also looking to deliver an international website in 2018.

    “Adairs has considerable opportunity to grow inside and outside of Australia and we will continue to assess these opportunities over the coming year,” he said.

    Ronan said Adairs will also continue to invest in their product team by adding resources to ensure that they “can deliver great product to customers.”

    “As I reflect on the lessons of the last 12 months, it has served to enhance my confidence that our strategy is sound, and our results will be most influenced by our successful execution of this strategy, rather than matters beyond our control,” he said. “‘Product, product and product’ refers to our product differentiation, range optimisation and merchandise planning strategy. Adairs is a product and design led business. Great product is critical to our success.”

    The company has posted a seven per cent increase in total sales for FY17, like-for-like sales, however, finished down 1.4 per cent.

    The company’s online sales continued to grow with investments in this area seeing second half sales up 41 per cent on the prior year. Despite growing total sales, Adairs’ NPAT result was well down on the prior year, with the large majority of this decline coming in the first half.

    Michael Butler, chairman of Adairs also addressed the ASIC infringement notice, denying the allegation asserting the retailer “has complied with its continuous disclosure obligations at all times.”

    “Nevertheless, your Bboard considered that it was in the best interests of Adairs to pay the penalty of $66,000 to enable the management team to focus on the operations of the business and avoid the anticipated cost and management diversion of defending this allegation,” he said.

    “Adairs is committed to keeping our shareholders fully informed.”

  • Adairs upgrades guidance

    Adairs upgrades guidance

    Bedding retailer Adairs has upgraded its guidance for FY18 after experiencing a bumper start to the financial year.

    Adairs CEO Mark Ronan told the market on Wednesday afternoon that year-to-date LFL sales  were up 13 per cent to October 15.

    It’s a continuation of trading momentum kicked-up in the second-half of FY17, with July LFL sales growth spiking to 10.4 per cent after a disastrous first half that drove FY17 profits down 19.6 per cent.

    The company now anticipates FY18 earnings before interest and tax (EBIT) of $34.5 – 39 million, up from its prior guidance of $33 – 37 million on the back of a $5 million bump in its total sales growth estimates.

    However, Ronan did say that the company anticipates its year-to-date sales to moderate somewhat as trading heads into the upcoming holiday promotional period in the December quarter.

    “While our year-to-date sales have been pleasing, the key trading periods and promotional events lay ahead in the financial year,” he said.

    Adairs anticipates LFL sales growth in the 5 – 10 per cent range for FY18, saying it will provide an update on its strategy at its upcoming Annual General Meeting.

    Ronan has previously said that the company’s poor performance in the first-half of FY17 was due to mistakes made by management which are unlikely to be repeated, and that its new range of high-end linen and velvet doonas were doing extremely well with customers.

    He’s also indicated that Adairs is evaluating whether to sell on Amazon marketplace when it launches in Australia in the coming months, something that he’s previously identified as a strategic opportunity for the business.

  • Adairs signals strength for year ahead

    Adairs signals strength for year ahead

    Bedding retailer Adairs has enjoyed another bump with investors following its full-year result, with CEO Mark Ronan providing comprehensive guidance that momentum from 2H17 will continue into FY18.

    Adairs booked a 19.6 per cent decrease in net profit after tax to $21 million for the year ended 30 June and a 21.5 per cent decline in earnings before interest and tax to $30.8 million, but the result was somewhat expected given the multiple trading updates previously provided by the company.

    Ronan has twice reiterated the sharp uptick in Adair’s trading performance in the second half, with LFL sales spiking to 10.4 per cent in July, but it was a forecasted EBIT range of $33 – 37 million, specificity that’s been hard to come by in retail earnings thus far, that was focused on.

    FY18 sales are predicted to be between $285 – 300 million, up from $265 million in FY17, on the addition of two-new stores, while gross margins are slated to remain steady after falling 1.8 per cent to 59.2 per cent in FY17.

    1H17 LFL sales decreased by 1.4 per cent, but 2H17 LFL sales increased by 1 per cent, with -0.5 LFL growth in April and May offset by 9.1 per cent growth in June and 10.4 per cent growth in July.

    “The last 12 months saw a tale of two halves,” said Ronan. “The first half of FY17 was a challenging period, as range issues in some product categories together with a softer than expected Christmas period impacting the performance of the business.”

    “The pleasing second half result has positioned the business for growth in FY18. The previous product range issues have been largely addressed and we have seen the business return to like-for-like sales growth in June. With renewed confidence in our product execution, and continual improvement in our promotional and in store execution, there is improved momentum within the business,” Ronan said.

    “FY18 sales growth will be driven by a return to LFL sales growth, further new store roll outs in ANZ and ongoing growth in our online channel,” he continued.

    The bedding chain will open between four and six stores, in addition to upsizing six more locations in Australia. Two more stores are planned for New Zealand, in a move to get “closer to profitability”, as the retailer looks to build its brand and consumer awareness across the Tasman.

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  • Adairs takes double digits to the market

    Adairs takes double digits to the market

    Bedding retailer Adairs has issued its second trading update in as many months, delivering the news that like-for-like sales growth has hit double digits in the first weeks of FY18.

    LFL sales soared to 10.4 per cent in the six weeks to 13 August, following 9.1 per cent growth in the prior six weeks, turning around three consecutive months of negative growth through Q2 and Q3 in FY17.

    Still yet to book his full year result with the market, Adairs CEO Mark Ronan chalked up the increasing momentum to the company’s new line of up-market manchester, which continues to be a hit with customers.

    “Adairs improved sales performance over the last 10 weeks provides us with increased confidence that the measures taken in the first half of FY17 were successful in re-positioning the business, including our new product offering resonating with our customers,” he said.

    He did, however, signal that the company expects growth to moderate somewhat through FY18, which will be further discussed at the company’s full year result on 28 August.

    Ronan’s update was received well in early Thursday trading, with Adairs’ share price up 6 per cent, adding to the more than 50 per cent rise since it signalled the trading turnaround in July.

  • Adairs up on late year turnaround

    Adairs up on late year turnaround

    Big-box bedding retailer Adairs has turned around a weak start to FY17, advising the market this morning that it expects total sales during the second-half to increase by 8.3 per cent to $140.4 million.

    CEO Mark Ronan now expects to reveal full year sales of $264.9 million next month, noting that a 3.8 per cent increase in sales during Q4 had saved the year.

    Second-half like for like sales increased by 1 per cent, crimping a 6.8 per cent decline during Q2 and a 2.4 per cent decline in Q3.

    Adair’s share price spiked in early Wednesday trading on the news, increasing by more than 26 per cent to $1.20, breaching the dollar mark for the first time since April.

    Ronan told shareholders that issues in its bed linin range identified in the first half have been “largely resolved”, with new products coming in to bring the core category back into black in the second half.

    “The business continues to make changes to address the issues that led to the disappointing first half results,” Ronan said.

    “While we are pleased to see sales in the bed linen category improve, we continued to see higher than usual sales variability across our store formats, centre types, product categories and geographies,” he continued.

    With full-year like for like sales still expected to decline by 1.4 per cent, in line with its previous guidance, Ronan outlined the well-noted “subdued retail environment” as a factor, also noting that there’s still room for improvement on product and store execution.

    The company is due to hand down its audited full-year results on August 28.