Bedding retailer Adairs has upgraded its guidance for FY18 after experiencing a bumper start to the financial year.
Adairs CEO Mark Ronan told the market on Wednesday afternoon that year-to-date LFL sales were up 13 per cent to October 15.
It’s a continuation of trading momentum kicked-up in the second-half of FY17, with July LFL sales growth spiking to 10.4 per cent after a disastrous first half that drove FY17 profits down 19.6 per cent.
The company now anticipates FY18 earnings before interest and tax (EBIT) of $34.5 – 39 million, up from its prior guidance of $33 – 37 million on the back of a $5 million bump in its total sales growth estimates.
However, Ronan did say that the company anticipates its year-to-date sales to moderate somewhat as trading heads into the upcoming holiday promotional period in the December quarter.
“While our year-to-date sales have been pleasing, the key trading periods and promotional events lay ahead in the financial year,” he said.
Adairs anticipates LFL sales growth in the 5 – 10 per cent range for FY18, saying it will provide an update on its strategy at its upcoming Annual General Meeting.
Ronan has previously said that the company’s poor performance in the first-half of FY17 was due to mistakes made by management which are unlikely to be repeated, and that its new range of high-end linen and velvet doonas were doing extremely well with customers.
He’s also indicated that Adairs is evaluating whether to sell on Amazon marketplace when it launches in Australia in the coming months, something that he’s previously identified as a strategic opportunity for the business.