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- Adairs (ADH) has tabled unaudited group H1 FY22 financial results which show lockdowns and higher delivery costs have eaten away at earnings
- Adairs says it expects underlying earnings before interest and tax (EBIT) to be between $32 million and $33 million for the six months ending December 31, down from $60.2 million the previous year
- Adairs expects group sales to be nearly on par for its H1 FY21 result of $243 million, dipping slightly to $242 million
- The most significant impact on Adairs’ total sales in the half was the government-mandated store closures with NSW and Victoria stores heavily impacted
- Shares in Adairs are down 21.5 per cent on the market and are trading at $2.99
Adairs (ADH) has tabled unaudited group H1 FY22 financial results which show lockdowns and higher delivery costs have eaten away at earnings.
Adairs said it expects underlying earnings before interest and tax (EBIT) to be between $32 million and $33 million for the six months ending December 31, down from $60.2 million the previous year.
“Whilst gross margin will be below 1H FY21 as expected, it remains well ahead of 1H FY20 which was prior to the pandemic,” the company said in an announcement.
The company said gross margin has been impacted by global supply chain cost increases, higher delivery costs to online customers and additional promotional activity
Adairs expects group sales to be nearly on par for its H1 FY21 result of $243 million, dipping slightly to $242 million, but roughly $61.7 million above 1H FY20 results.
Of this $242 million, a $12.5 million contribution came from Focus on Furniture over a period of 26 days, which Adairs acquired in November. The company contributed $2.8 million to EBIT.
Group online sales, excluding Focus, were up 8.2 per cent to $97.6 million while Adairs and Mocka online sales were up 1.6 per cent and 22.8 per cent, respectively.
The most significant impact on Adairs’ total sales in the half was the government-mandated store closures with NSW and Victoria stores heavily impacted.
Adairs estimates that COVID-related shop closures affected its sales by $30-36 million and EBIT by $14-$18 million in the first half.
Stock flow into Australia and New Zealand from Asia remains inconsistent due to factory and shipping capacity disruptions.
“During the half, despite significant operational disruptions, we have made strides in progressing our strategic priorities by commissioning our new National Distribution Centre, upsizing selected stores, continuing to expand our range and adding to our omni-channel capabilities,” CEO and Managing Director Mark Ronan said.
“We also built our portfolio of vertical omni-channel retail brands by bringing forward the finalisation of the Mocka acquisition, and completing the acquisition of Focus on Furniture.”
Shares in Adairs were down 21.5 per cent on the market and were trading at $2.99 at 12:36 pm AEDT.
