The Adairs Ltd (ASX: ADH) share price is up 4% after the business announced its FY26 half-year result.
Adairs is a homewares and furniture business with three different businesses – Adairs, Mocka and Focus on Furniture.
Adairs FY26 half-year result
Here are some of the numbers from the report for the first six months of FY26:
- Total sales grew by 5.9% to $329 million
- Gross profit margin worsened by 120 basis points (1.20%) to 58.7%
- Gross profit grew 3.6% to $153.9 million
- Underlying EBITDA (EBITDA) declined 5.7% to $36.9 million
- Underlying EBIT fell 9.1% to $30 million
- Underlying earnings per share (EPS) fell 8.5% to $0.108
- Statutory net profit fell 33.8% to $12.8 million
- Dividend per share reduced by 15.4% to $0.055
What happened?
Performance was mixed across the businesses.
Adairs total sales rose 4% to $229.4 million and underlying EBIT declined 10% to $18.6 million.
Focus on Furniture revenue grew 1.9% to $63.1 million and underlying EBIT sank 31.7% to $5.8 million.
Mocka revenue jumped 29.8% to $36.5 million and underlying EBIT soared 45.5%.
Adairs saw its gross profit margin worsen by 170 basis points (1.70%) with a higher sales contribution coming from key promotional events of the Linen Lover (Adairs membership) event, Black Friday and Boxing Day.
However, the Adairs business cost of doing business (CODB) declined 50 basis points (0.50%) with improved store and warehouse operational efficiencies offset by higher delivery costs for online order, rents and key investments.
Mocka sales managed to perform strongly. The gross profit margin improved in both Australia and New Zealand, with new products enabling higher margins and a reduction in the depth and frequency of promotional activity.
Mocka’s shop-in-shop trial in New Zealand continues to be positive, with a sales contribution of $1.2 million.
Focus on Furniture’s performance was impacted by costs with new stores and a new distribution centre & office.
Outlook for the Adairs share price
The business showed positive sales growth across the business in the first seven weeks of the second half of FY26.
Group total sales were up 6.4%, Adairs sales rose 4.8%, Focus on Furniture grew 0.8% and Mocka sales jumped 31.3%.
It’s expecting sales, margin and underlying EBIT margin growth in the second half of FY26.
On the store count, in the second half of FY26, the company said three to four new Adairs stores will be opened, with six to seven store closures, plus one or two upsizings. A new concept store will open at Bondi Junction in the fourth quarter of FY26.
For Focus on Furniture, one new store is planned for the second half of FY26, with between three to five additional stores planned by the end of FY27. A WA entry is under review for FY27.
Mocka’s first standalone store is planned to open in May 2026, with a second store also committed.
With the Adairs share price down more than 30% from its 52-week high, this could be a good time to look at the business as a contrarian idea that could rebound. But, I’m not expecting strong continuous performance by the business. Mocka becoming a larger proportion of the business is an attractive outlook and could help boost the Adairs share price over time.
