Adairs (ADH) H2 2025 earnings summary

Executive summary

• Group sales rose 6.5% to $618.1 million, with record results for Adairs and Mocka, but a decline at Focus on Furniture.

• Underlying EBIT increased 1.4% to $55.2 million, with Adairs and Mocka up over 21% each, while Focus on Furniture declined 36.6%.

• Vision 2030 strategy launched, focusing on sustainable, profitable growth and operational excellence, with leadership renewal and new governance structure.

• Net debt increased by $3.4 million to $67.6 million, with leverage at 1.0x EBITDA.

• Final fully franked dividend of $0.04 per share, total FY 2025 dividend $0.105 per share (72% payout).

Financial highlights

• Adairs sales up 9.5% to $442.2 million, Mocka up 14.7% to $57.9 million, Focus on Furniture down 6.5% to $117.9 million.

• Group underlying EBIT up 21% for Adairs and Mocka, but Focus on Furniture EBIT down 36%.

• Group gross margin declined 140bps to 58.9%; Adairs margin down 170bps to just over 61%.

• Warehouse cost savings exceeded $6 million since site control, with further 8.5% reduction in FY 2025.

• Group inventory closed at $96 million, up 14.7% year-over-year.

Outlook and guidance

• FY 2026 is a foundation year for Vision 2030, with focus on customer engagement, brand, and operational excellence.

• 3-5 new Adairs stores and 3-4 upsizes planned; Focus on Furniture targeting 3-5 new stores and refurbishments; Mocka to open first standalone store.

• Adairs expects sales growth of 4%-7% in H1 FY 2026, with margins recovering after Q1 clearance activity.

• Focus on Furniture targets 3%-6% sales growth in H1 FY 2026, with margin improvement expected.

• Mocka anticipates 20%-30% sales growth in H1 FY 2026, with some margin pressure from currency and promotions.