Adairs (ASX: ADH) shares are up 13% after the company gave an update this morning.
What is Adairs?
Adairs is a home furnishings retailer that opened its first store in Victoria in 1981. Around 90% of Adairs’ range that is sold is private brand. Adairs has over 160 stores in Australia in five formats: Adairs, Adairs Homemaker, Adairs Kids, UHR and Adairs Outlets.
The impressive update
After COVID-19 caused stores to shut, Adairs said that all stores are now open with increased safety measures for customers and staff. With all stores having now been open for at least two weeks, the company gave a trading update to 14 June 2020.
In the FY20 second half to 14 June 2020, stores have seen a 5.3% increase in like for like sales, online sales have grown 92.6% and total like for like sales were up 27.4%. The store sales are provided on a store by store, daily basis, only open stores have been included. Mocka sales, which is 100% online, were up 52.1%.
In terms of total FY20 year to date sales, like for like (open) store sales were up 3.5%, online sales were up 64% and total like for like sales were up 15.7%.
Adairs is now expecting FY20 total sales to be between $385 million to $390 million. However, the company said that there is elevated uncertainty for the medium term.
Nick Scali Managing Director and CEO Mark Ronan said: “Our omni channel strategy and focus on the home decorating and furnishing category has served us well during this period were our customers have spent significantly more time at home.
Mr Ronan said that both Adairs and Mocka have remained disciplined on inventory and margin management.
Adairs has recovered almost all of the lost ground from the COVID-19 selloff. It still could be a decent buy if this growth rate continues, but it’s very hard to say if it will or not with the economic uncertainty.
Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.