This report is an updated version of the report published on 24 February 2026 at 12:24 PM AEDT 

Adairs Limited (ASX: ADH)

ADH is an Australia-based omnichannel specialty retailer operating across Australia and New Zealand. It retails homewares, furniture, and home furnishings, through both retail stores and online channels. It offers products under three brands: Adairs, Focus on Furniture, and Mocka.

Recommendation Rationale – SELL at AUD 2.29

• Technical Standpoint: ADH shares have crossed the R1 level recommended on 19 February. Meanwhile, its 14-day RSI is hovering around 68.77 level, suggesting the stock is approaching overbought zone; hence some consolidation or pullback is expected in the stock in the near term.
• Margin Pressure: ADH's gross margin declined -170bps to 60.7% in H1FY26 due higher input costs, increased promotional activity, and ongoing investment in customer acquisition. This reflects a competitive retail environment and constrained pricing power.
• Weak Performance in Focus on Furniture Segment: The Focus on Furniture division continued to underperform (sales of AUD 63.1mn in H1FY26, up 1.9%, while like-for-like sales declined -3.3%), impacted by weak consumer demand for large-ticket household items, reflecting cautious discretionary spending amid cost-of-living pressures.
• Housing Market and Turnover Risk: ADH’s performance is closely linked to housing activity, including new home construction, renovation, and property turnover. A slowdown in housing markets or reduced renovation activity may weaken demand for its products.

Daily Price Chart

Valuation Methodology: Price/Earnings Per Share Approach (Illustrative)

The stock might trade at a slight discount to its peers considering 170bp annual decline in gross margin in H1FY26, continued underperformance in Focus on Furniture division, elevated operating cost, etc.

For conducting valuation, peers including Michael Hill International Ltd (ASX: MHJ), Dusk Group Ltd (ASX: DSK), MotorCycle Holdings Ltd (ASX: MTO) and others have been considered.

Given the stock has crossed its R1 level and approaching its R2 level, recent rally in the share price, and risks associated, it is prudent to sell the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 2.03, as of 24 February 2026, at 11:21 AM AEDT.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

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

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 24 February 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 5: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices