Now that’s a positive reaction – manchester and homewares group, Adairs saw its shares leap more than 34% in yesterday’s negative market after a surprise upgrade to its outlook.
Coming from the depressed retail sector the upgrade was doubling surprising.
Adairs told the ASX it expects full-year sales to come in at the top end of guidance after a strong second half of the financial year.
The retailer says it sees full-year sales for the 12 months to June 30 of $264.9 million, which is at the upper end of the $255 million to $265 million range it forecast with the disappointing first-half results in February.
Those figures saw the shares dumped by nervy investors and the lost 20% in a day especially as the company also revealed a 35% slide in interim profit. The shares kept falling in the months from February and hit 95 cents at the close on Tuesday, against the $1.40 the shares were trading at before the interim profit announcement.
Yesterday’s rebound saw the shares fall short of the $1.40 level, but they got close, peaking at $1.29 a share and closing at $1.27.5, up more than 34%.
“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,” chief executive Mark Ronan said in a statement to the ASX.
"This is perhaps symptomatic of a more subdued retail environment, but also indicates further room to improve our product and store execution."
“The business continues to make changes to address the issues that led to the disappointing first half results," Mr Ronan said. The key to the improvement has been the turnaround like for like sales (same store). Adairs said yesterday that after a static performance in the first quarter of 2016-16, December quarter sales slumped by 6.8%, producing the weak first half sales and profit performance.
"The March quarter this year saw a better performance, though like for like sales were still down – by 2.4%. But the three months to June saw a surge with sales up 3.8%.
Overall, Adairs achieved second half like for like sales of +1.0% and full year like for like sales of -1.4%, in line with previous guidance.
Adairs reports its full year results on August 28.
