Adairs puts retail concerns to bed with comfy online growth

Written on the 25 February 2019 by Business News Australia

Adairs puts retail concerns to bed with comfy online growth

Bedding retailer Adairs (ASX: ADH) improvd its online sales in the first half of 2019 and notched an uptick as a result.

During the first half online sales contributed 15 per cent of Adairs' total sales, with sales via the company's online store up 42 per cent to $24.3 million.

Overall sales were up 10.6 per cent to $164.4 million from the company's 166 total stores plus its online shopfront.

The company opened four new stores during the half, upsized two, refurbished four and closed five including three of its Myer concession stores.

The company saw its gross profit increase by 11 per cent during to $100 million, whilst NPAT rose by 9.1 per cent to $14.9 million.

Managing director and CEO Mark Ronan says he is confident that the growth seen in the half will continue into the future, especially considering the strength of Adairs' online offering.

"We are confident that our strategic priorities will continue to deliver profitable growth," says Ronan.

"Another terrific online result combined with further progress in our category expansion strategy delivered a 9.1 per cent increase in our net profit after tax to $14.9 million for the half."

In New Zealand sales grew 30 per cent on the prior year which Adairs says was a result of improving its supply chain, reworking its price points to suit the New Zealand customer, and building further brand awareness in the country.

The board has declared an interim dividend of 6.5 cents fully franked, up 18 per cent from 1H18.

In the first seven weeks of the second half Adairs says it has already seen sales growth of 7.1 per cent.

The company expects to continue to generate sales growth during the rest of FY19, and will add two to three new stores.

Shares in Adairs are down 4.66 per cent to $1.94 per share at 11.32am AEDT.

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