Adairs posts weak first half

AdairsHomewares and linen retailer, Adairs, posted a 35.3 per cent profit decline in the half year to $8.6 million following a weak Christmas trade.

The retailer stated the results came short of its expectations.

The company’s like-for-like sales slipped four per cent in the six months to January 1, and while the first weeks of the second half has seen an improvement in the like-for-like sales, the retailer had stated it is too early to know if its trading performance will consistently improve.

Total sales for the half year climbed 5.7 per cent to $124.50 million compared to the previous corresponding period.

Mark Ronan, Adairs CEO, said like-for-like sales in the first seven weeks of the second half of its 2017 financial year was down only two per cent.

He stated however that while this is an improvement, and in line with their expectations, they are seeing higher than usual sales volatility across product categories.

“It is too early to forecast a consistent improvement in our trading performance,” he said.

According to Ronan, the group understood the issues that led to its disappointing first half results, which included a weaker than expected Christmas trade and missed opportunities in the fashion linen product category.

“As the new season fashion linen has started arriving in store there are early reads on product which support the emergence of a turnaround in performance,” he said.

“However given the short time available and the apparent retail sector softness, we believe it could take longer for the results to materialise.”

The retailer’s profit was hurt by adverse foreign exchange movements, Ronan stated, as well as the additional clearance activity needed to drive sales and remove inventory following the weak Christmas trade.

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