Half Year 2024 Adairs Ltd Earnings Call Transcript
Key Points
- Adairs Ltd (ASX:ADH) successfully delivered on short-term objectives to reduce the impact of sales decline on group EBIT.
- Online sales outperformed in-store sales, particularly during key events like Black Friday.
- Gross margin improved across all brands due to reduced shipping container rates and disciplined pricing strategies.
- The National Distribution Centre transition to Adairs management resulted in improved service levels and lower costs.
- Mocka brand delivered a strong performance with an EBIT of $3.5 million, significantly improving from the previous year.
- Sales were down across Adairs and Focus brands due to reduced customer traffic and port delays causing stock shortages.
- Group EBIT of $28.6 million was down 19% compared to the prior year.
- Significant inflationary pressures impacted the cost of doing business, despite cost reduction efforts.
- Focus on Furniture sales were down 15.8% on the prior year, with industrial action at Melbourne Ports delaying deliveries.
- Adairs experienced stock shortages in core lines, impacting sales during the second quarter.
Thank you for standing by, and welcome to Adairs Limited Interim FY '24 Results. (Operator Instructions)
I would now like to hand the conference over to Mr. Mark Ronan, Managing Director and Chief Executive Officer. Please go ahead.
Good morning, everyone, and welcome to the Adairs first half 2024 results call. Joining me this morning on the call is Ash Gardner, our CFO, and Jamie Adamson, our Head of Investor Relations. Whilst the first half of 2024 was challenging from a sales perspective, the group successfully delivered on a range of short-term objectives to reduce the impact of the sales decline on the group EBIT.
Sales were down across Adairs and Focus, with both brands impacted by reduced customer traffic and port delays that resulted in stock shortages towards the back end of the season. Across the group, online outperformed stores on the back of key events such as Black Friday, where urgency drives a high conversion for the online channel.
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