Adairs (ADH) a surprise winner from lockdowns
Adairs (ADH) +11.31%: one of the winners of lockdowns appears to be homewares retailer Adairs which saw EBIT rise 24% in its main brand, while the contribution of the online only company Mocka helped total group EPS rise 17% to 21c, a 9% beat to estimates. Online sales were the main driver with a meteoric 110.5% rise, making up 31.9% of total sales. Despite the up to 8 weeks’ worth of lockdowns, in store LFL sales also comped positively to the tune of +3.9%. Clearly spending that would otherwise have been directed to tourism or activities that were restricted was redirected towards spending on home comforts. Despite the online growth explosion Adairs was not looking to significantly reduce the store footprint noting the collective strategy was far more effective than a singular focus. i.e. the omni channel approach I spoke about with Danny Younis recently.
A key differentiator to the competition is the Linen Lover membership Adairs offers which now has over 800k paid customers – a network that is invaluable in terms of repeatable business. While lockdowns may not last forever, Adairs looks to have leveraged the impact to create lasting value in the business. While no guidance was provided, the momentum had continued into the first 5 weeks of the new financial year.
Adairs (ADH) Chart
