Key Highlights

  • Group sales rose 3.8% to $641.7 million, with growth at Adairs and Mocka partly offset by a decline at Focus on Furniture.
  • Statutory net loss after tax of $39.4 million, reflecting a non-cash Impairment at Focus on Furniture, SaaS project costs and Adairs New Zealand exit costs.
  • Underlying Group EBIT of $55.0 million, down 0.4% from $55.2 million, with Adairs and Mocka delivering double-digit growth.
  • Board declared a fully franked final Dividend of 6.0 cents per share, taking full-year dividends to 11.5 cents per share, up 9.5% on FY25.

Adairs Limited (ASX:ADH) shares traded at $1.48 on 24 August 2026, up 4.59 percent, or 6.5 cents, after the retailer released its audited results for the 52 weeks ended 28 June 2026.

Adairs reported group sales of $641.7 million for FY26, up 3.8 percent from $618.1 million in FY25, with growth at the Adairs and Mocka brands partly offset by a decline at Focus on Furniture. Group gross Margin improved 10 basis points to 59.0 percent, supported by pricing discipline and reduced promotional depth at Adairs and Mocka, though this was partly offset by clearance activity at Focus on Furniture. Underlying EBITDA increased 1.0 percent to $68.7 million, while underlying EBIT declined slightly by 0.4 percent to $55.0 million. Underlying net profit after tax rose 1.7 percent to $34.6 million, with underlying Earnings Per Share of 19.5 cents, up from 19.3 cents.

Statutory results told a different story: the group reported a statutory net loss after tax of $39.4 million, compared with statutory net profit of $25.7 million in FY25. The loss reflected the non-cash impairment at Focus on Furniture, costs associated with a SaaS technology project, exit costs from the closure of Adairs New Zealand, and the impact of AASB 16 Lease accounting.

Segment Performance: Adairs

The Adairs Brand delivered sales of $459.2 million, up 3.9 percent, with like-for-like store sales increasing 1.4 percent and online sales growing 9.4 percent. Growth was supported by updated ranges across bed linen, bedding, towels and cushion categories, while gross margin improved through the year following clearance activity in the first quarter, with a 150 basis point improvement in the second half. The store network was adjusted through five new store openings, three refurbishments, and the closure of 13 smaller or unproductive stores, including eight in New Zealand as the company exited that market. Underlying EBIT for the segment grew 14.9 percent to $41.1 million, with EBIT margin improving to approximately 9.0 percent from 8.1 percent.

Segment Performance: Mocka

Mocka recorded sales growth of 22.9 percent to $71.2 million, driven by a 38.0 percent increase in Australian sales, while New Zealand sales rose a more modest 0.4 percent. Underlying EBIT for the segment increased 32.1 percent to $10.1 million, representing a margin of 14.1 percent. The brand opened its first standalone store in Maroochydore, Queensland, in June 2026, followed by a site Takeover in Christchurch in July 2026, with a third store planned for Mornington, Victoria, in the third quarter of FY27.

Segment Performance: Focus on Furniture

Focus on Furniture recorded a difficult year, with sales down 5.6 percent to $111.3 million and underlying EBIT down 67.6 percent to $3.8 million. Trading was comparatively stable for the first three quarters before a sharp decline in the fourth quarter, following a management transition that reduced visibility of inventory planning and interrupted ordering, discounting and promotional settings. The company recognised a non-cash impairment of $63.5 million against the Goodwill and brand intangibles of Focus on Furniture, which it noted has no effect on cash flow, Debt facilities or banking covenants. A revised Leadership team has since re-established ordering processes and restored discounting discretion to store teams, with new product collections beginning to arrive from the second quarter of FY27.

Balance Sheet, Cash Flow and Dividend

Group net debt reduced to $47.6 million at year-end, down from $67.6 million a year earlier, equivalent to approximately 0.7 times underlying EBITDA. Underlying Operating Cash Flow was $65.0 million, while inventory closed the year at $91.2 million, down 5.0 percent. The board declared a fully franked final dividend of 6.0 cents per share, bringing total FY26 dividends to 11.5 cents per share, an increase of 9.5 percent on FY25.

Trading Update and Outlook

In the first eight weeks of FY27, group sales, excluding the exited New Zealand business, were down 4.5 percent on the prior year. Adairs sales were broadly steady, up 0.4 percent, affected by the timing shift of a promotional event, while Mocka sales rose 15.3 percent. Focus on Furniture written sales fell 27.6 percent as inventory availability constraints persisted into the new financial year, with the company anticipating recovery from the second quarter of FY27. The company has not provided FY27 earnings guidance.

Conclusion

Adairs Limited's FY26 results show a divergence between its two growth brands and its turnaround business, with Adairs and Mocka delivering sales and earnings gains while Focus on Furniture recorded a sales decline and a substantial non-cash impairment. The exit of the loss-making New Zealand operation and reduction in net debt point to a simplified Balance Sheet position heading into FY27, even as the statutory result was weighed down by one-off items and the group navigates a challenging start to the new financial year at Focus on Furniture.