Adairs (ADH) H1 2026 earnings summary

Executive summary

• Group sales reached AUD 329 million (or $329.0 million), up 5.9% year-over-year, with all brands contributing to growth and Mocka leading at 29.8%.

• Underlying EBIT declined 9.1% to AUD 13 million (or $30.0 million), with Adairs and Focus on Furniture down, but Mocka up 45.5%.

• Net debt reduced by AUD 14.0 million to AUD 53.6 million, with gearing at 0.8x net debt/EBITDA.

• Interim fully franked dividend of 5.5 cents per share declared, totaling AUD 9.8 million and representing 76% of statutory NPAT.

• Key executive changes include new Group CFO and new CEO for Focus on Furniture.

Financial highlights

• Group sales: AUD 329 million (+5.9% YoY); Adairs AUD 229.4 million (+4.0%), Focus AUD 63.1 million (+1.9%), Mocka AUD 36.5 million (+29.8%).

• Underlying EBIT: AUD 13 million (or $30.0 million, -9.1% YoY); Adairs AUD 18.6 million (-10.0%), Focus AUD 5.8 million (-31.7%), Mocka AUD 5.6 million (+45.5%).

• Group gross margin: 58.7% (-120bps YoY); EBIT margin: 9.1% (-150bps YoY); Adairs gross margin down 170bps.

• Net debt: AUD 53.6 million (down from AUD 57.8 million YoY); inventories: AUD 93.3 million (down from AUD 97.6 million YoY).

• Net cash flows from operating activities were AUD 50.9 million, up from AUD 49.0 million.

Outlook and guidance

• Group expects sales, margin, and underlying EBIT growth in H2 FY2026 versus prior year.

• For first 7 weeks of H2, group sales up 6.4%; Adairs up 4.8%, Focus up 0.8%, Mocka up 31.3%.

• 3-5 new Adairs stores, 1 new Focus store, and first Mocka standalone store to open in H2; 6-7 Adairs stores to close.

• Adairs gross margin expected to recover to 62%+ in H2, with further improvement in FY2027 aided by FX tailwinds.

• Capex guidance unchanged: AUD 25–30 million for FY26, with AUD 12–15 million in capital expenditure and AUD 13–15 million in project expenditure for Adairs data and technology upgrade.