The Adairs Ltd (ASX: ADH) share price is in focus after the homewares and furniture retailer announced an update about FY26.
Adairs operates three different businesses – Adairs, Mocka and Focus On Furniture.
FY26 update
Adairs is holding its annual general meeting (AGM) today and gave investors some details about its sales and gross margin expectations.
It said that year-to-date trading in the first half of FY26 has been “largely in line” with what was foreshadowed in its commentary provided in August 2025 with the FY25 result.
But, the company said Adairs sales growth has moderated as the company pulled back on the frequency and intensity of its promotional activity.
It also said that after an encouraging start, sales at Focus on Furniture have slowed despite ongoing promotional activity, leading to a lower-than-planned gross profit margin.
Mocka’s strong sales momentum has been maintained with customers continuing to respond well to new products.
Adairs said the next 10 weeks is the most important trading period for the half, delivering 55% of sales for the half. The HY26 result is heavily dependent on performance during this period.
Guidance update
The company has lowered its guidance for the first half of FY26.
Group sales are now expected to be between $319.5 million to $331.5 million, down from prior guidance of $324.5 million to $336.5 million. The group gross profit margin is now expected to be between 59% to 59.5%, which is a change from 58.8% to 59.6%.
Adairs sales are now expected to be between $225 million to $232 million, down from $229 million to $236 million. The gross profit margin is expected to be between 61.4% to 61.9%, which is somewhat stronger than previous guidance of 60.9% to 61.9%.
Focus on Furniture is now expecting modestly lower sales and a lower gross profit margin. The mid-point for Mocka’s guidance has been modestly increased for both sales and the gross profit margin.
Outlook for the Adairs share price
The company said it remains “cautiously optimistic” about the trading outlook for the rest of the half and all three businesses are “well stocked”.
I wouldn’t say Adairs is the strongest or highest-quality retailer on the ASX, but it can be a cyclical opportunity when it falls heavily because of the potential to bounce back.
At this stage, I wouldn’t invest above $2, I’d focus on other ASX shares.
