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.