Adairs customers are still furnishing their homes despite a housing market downturn, though the manchester retailer has moderated its earnings guidance on a depreciating dollar and a tough retail environment.
On Monday the company reported a first-half profit increase of 6.83 per cent to $14.89 million, following a period of significant online growth.
Revenue for the six months to December 30 was up 10.6 per cent to $164.37 million, while Adairs lifted its interim dividend by a cent to 6.5 cents, fully franked.
But the company sightly downgraded its full-year earnings guidance to between $46 and $50 million, from between $47.5 to $51.5 million, as it braces for the impact of a depreciating dollar ‘and a potentially more challenging consumer environment’.
Shares in Adairs were worth $1.945 at 1207 AEDT, down 4.66 per cent, and 25 per cent lower from a 27-month high of $2.60 in September.
Adairs chief executive Mark Ronan said the first half was solid and helped by a ‘terrific online result’ plus category expansion.
‘Adairs growth over the first half, despite a weaker housing market, shows that our focus on delivering great product at a good price, combined with our relatively low average transaction value, positions the business well to navigate a continually changing market,’ Mr Ronan said.
Like-for-like sales grew 7.3 per cent, while the chain opened four stores and closed five, three of them in Myer.
Revenue from sales in stores amounted to $140.10 million, while online transactions grew 42 per cent from last year, generating $24.26 million and making up 15 per cent of total sales.
On Monday Mr Ronan told investors the company would be looking towards automation in order to streamline online orders and improve on efficiency and time of dispatch.
The roll-out of a click-and-collect service is a work in progress with Mr Ronan saying he wouldn’t promise a timeline after missing the previous expectations ‘four times.’
The home furnishings company said the market in New Zealand had exceeded previous guidance, and was now profitable up 30 per cent from the previous year.
Further growth is expected in the years ahead with Mr Ronan saying the company was looking into an additional one or two stores in New Zealand over the next twelve months.
ADAIRS FIRST-HALF PROFIT UP
* Net profit up 6.83 pct to $14.89m
* Sales revenue up 10.6 pct to $164.4m
* Fully franked interim dividend up 1.0 cent to 6.5 cents