Adairs’ full-year earnings weighed down by promotional blitz

Home furnishings chain Adairs says it is on track to deliver record sales in the 2025 financial year, but heavy discounting to achieve this has dented margins.

In a mixed trading update which sent shares down 20.5 per cent to $2.05 on Monday, Adairs said full-year sales were forecast to hit between $614 million to $618m, up from last year’s $594.4m.

Underlying earnings are expected to hit between $53.5m to $57m, which is flat against the $57.6m recorded last year.

But the company — also behind furniture brands Focus and Mocka — said elevated promotional activity aimed at driving sales and managing stocks, alongside the weaker Australian dollar, was “adversely impacting gross margins”.

While its flagship Adairs and Mocka businesses were expected to deliver significant earnings before interest and taxes growth on last year, it would be offset by a material decline in the Focus brand, where sales remain challenging despite higher promotional activity.

“Management is evolving the positioning and execution capability of the business alongside the national store roll-out program, which is expected to accelerate in FY26,” the company said.

“Under Adairs’ new leadership, significant changes are being implemented across the business, designed to reset the foundations for long-term growth.”

Adairs last September named former Country Road managing director Elle Roseby as its new chief executive less than two months after she departed the scandal-ridden fashion house.

Adairs is set to release its full-year results on August 27.