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Big-box bedding retailer Adairs has turned around a weak start to FY17, advising the market this morning that it expects total sales during the second-half to increase by 8.3 per cent to $140.4 million.
CEO Mark Ronan now expects to reveal full year sales of $264.9 million next month, noting that a 3.8 per cent increase in sales during Q4 had saved the year.
Second-half like for like sales increased by 1 per cent, crimping a 6.8 per cent decline during Q2 and a 2.4 per cent decline in Q3.
Adair’s share price spiked in early Wednesday trading on the news, increasing by more than 26 per cent to $1.20, breaching the dollar mark for the first time since April.
Ronan told shareholders that issues in its bed linin range identified in the first half have been “largely resolved”, with new products coming in to bring the core category back into black in the second half.
“The business continues to make changes to address the issues that led to the disappointing first half results,” Ronan said.
“While we are pleased to see sales in the bed linen category improve, we continued to see higher than usual sales variability across our store formats, centre types, product categories and geographies,” he continued.
With full-year like for like sales still expected to decline by 1.4 per cent, in line with its previous guidance, Ronan outlined the well-noted “subdued retail environment” as a factor, also noting that there’s still room for improvement on product and store execution.
The company is due to hand down its audited full-year results on August 28.