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Highlights

  • Adairs is an omnichannel specialty retailer of home decoration and furniture products in New Zealand and Australia
  • In FY23, the company registered 10.1% YoY increase in revenue to AUD 621.3 million
  • In the December 2023 quarter, Australia’s CPI increased by 0.6% on quarterly basis and by 4.1% on annual basis, as suggested by ABS data

Adairs Limited (ASX: ADH) is an Australia-based omnichannel specialty retailer of home decoration and furniture products in New Zealand and Australia.

During the financial year 2023 (FY23), the company reported 10.1% YoY rise in revenue to AUD 621.3 million, backed by 20.9% increase in store sales. However, the revenue was partially offset by 10.5% YoY fall in online sales. During the reported period, the company witnessed 5.8% YoY increase in gross profit, underpinned by topline growth.

The company saw 14.3% YoY fall in EBITDA during the reported period to AUD 72.5 million and 11% YoY decrease in group inventory to AUD 88 million.

Recent business update

Through an ASX update, the company informed that it is set to share its financial results for the first half of FY24 on 26 February 2024. A conference call discussing these results for investors and analysts will be led by Ashley Gardner (CFO) and Mark Ronan (MD and CEO).

Outlook

The company anticipates headwinds in the short term. To preserve service quality and brand innovation while adjusting to the trading environment, the company’s management focuses on costs reduction.

The company has not shared any guidance for FY24 due to uncertainties, but it is optimistic that its robust business model would assist in overcoming those obstacles.

Key drivers for consumer sector

The data by the Australian Bureau of Statistics (ABS) indicated that in the December 2023 quarter, Australia’s CPI increased by 0.6% on quarterly basis and by 4.1% on annual basis. This is the fourth consecutive quarter of lower annual trimmed mean inflation, down from the peak of 6.8% in the December 2022 quarter.

In December 2023, the number of employed people in Australia increased by 3% YoY to 14,246,000.

Key challenges for consumer sector

As per the data by ABS, the number of employed people in Australia fell by 0.5% over the previous month on a seasonally adjusted basis, while the number of unemployed people in December 2023 decreased by 0.1% over previous month on seasonally adjusted basis.

Share performance of ADH

ADH shares closed 2.98% lower at AUD 1.63 apiece on 5 February 2024. With this, in the past 12 months, ADH’s share price has dropped by 42.40% and in the last three months, it has increased by 7.59%.

The 52-week high of ADH is AUD 2.81, recorded on 6 February 2023, and the 52-week low is AUD 1.195, recorded on 30 October 2023.

 ADH Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 05 February 2024. The reference data in this report has been partly sourced from EODHD/Others.