Homemaker Adairs says sales are looking up after last year’s shock downgrade
Health & Biotech
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Australian bedding and homewares chain Adairs has upgraded its earnings guidance after a rough year.
Investors sent its shares up 14 per cent to $2.11 on Friday morning.
They revised sales guidance was upgraded $5-10 million to $310-315 million since the last forecasts were given in February.
Earnings (before interest or tax) are expected to grow by up to $4 million to reach $44-46.5 million.
Debt at year end is expected to be between $12 million and $16 million, which may allow the company (ASX:ADH) to think about capital management initiatives come July.
“The upgrade to FY18 guidance has been underpinned by continued like for like sales growth over the second half,” the company said.
“Adairs has delivered like for like sales growth of 16 per cent, with second half (to date) like for like sales growth of 18 per cent.”
Adairs has been in trouble over disclosures before, forking out a $66,000 fine after the Australian Securities and Investments Commission (ASIC) alleged a breach of obligations for not updating forecast sales and expenditure figures in 2016.
Adairs acknowledged the fine without admitting liability.
ASIC alleged the company became aware of an almost $10 million downgrade of 2017 forecast figures on September 23 — but that no announcement to market was made until November 2.