Big bounce for Adairs
Retailer’s profit guidance sparks rally
SHARES in Adairs have soared by 34 per cent after the manchester and homewares retailer forecast full-year sales will hit the top end of its guidance.
Adairs says adjusted second-half sales across its stores have come in higher than expected at $140.4 million, up 8 per cent on the same period the previous year.
As a result, the company now expects revenue to hit $264.9 million for the 12 months to June 30, which is at the upper end of its $255 million to $265 million full-year sales guidance.
Pleased investors drove the company’s shares up 34.2 per cent, or 32.5 cents, yesterday to close at $1.275.
Chief executive Mark Ronan said it was a pleasing result in a subdued environment but the company should not be complacent.
“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 said in a statement.
“This is perhaps symptomatic of a more subdued retail environment, but also indicates further room to improve our product and store execution.”
The company said the crucial like-for-like sales figure, which strips out store closures and openings, had jumped 3.8 per cent in the final quarter.
This is a huge improvement on the 2.4 per cent fall in likefor-like in the third quarter and the 6.8 per cent fall in the second quarter.
During the second half, like-for-like sales were up one per cent, but for the year were down 1.4 per cent.
The positive share movement would be a welcome change for the company.
Adairs shares lost 20 per cent of their value in a week after the company in February revealed a 35.3 per cent slump in first-half profit. They have since continued to decline and were valued at 95 cents before the start of yesterday’s trade.
AAP