Adairs Ltd. (ADH) AI Stock Analysis

• Market Cap: AU$376.46M
• Dividend Yield: 6.1%
• Average Volume (3M): 757.18K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 2.41
• Revenue Growth: 0.49%
• EPS Growth: -3.64%
• Country: AU
• Employees: N/A
• Sector: Consumer Cyclical
• Sector Strength: 65
• Industry: Specialty Retail
• EPS (TTM): 0.12
• Shares Outstanding: 176,742,070
• 10 Day Avg. Volume: 348,946
• 30 Day Avg. Volume: 757,182
• PEG Ratio: 2.04
• Price to Book (P/B): 1.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.63
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$2.43
• Price Target Upside: 14.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 67 Neutral
• Price Target: AU$2.50 ▲(17.37%Upside)

Adairs Ltd.'s stock score reflects its strong valuation and solid financial performance. However, bearish technical indicators and challenges in revenue growth and leverage impact the overall attractiveness. The high dividend yield and low P/E ratio are key strengths.

Adairs Ltd. Business Overview & Revenue Model

Company Description

Adairs Limited operates as a specialty retailer of home decoration and furnishing products in Australia and New Zealand. It operates through three segments: Adairs, Mocka and Focus. The company offers bedroom products, such as bedlinen, bedding, and bedroom furniture and accessories; bathroom products, consisting of towels, bath mats, bathrobes and slippers, bathroom accessories, and laundry and home care products; furniture products, such as bedroom, office, living room, and kids furniture; homewares comprising home styling, home care and gifting, pets, and kitchen products; kid's products, including kids bedlinen, bedding, décor, bathroom, furniture, toys, and nursery; as well as gifting products. It sells its products under various brands and through online stores. The company was formerly known as Home & Decor Holdings Pty Ltd and changed its name to Adairs Limited in May 2015. Adairs Limited was founded in 1918 and is based in Scoresby, Australia.

How the Company Makes Money

Adairs Ltd. generates revenue primarily through the sale of its home furnishings and decor products. The company's key revenue streams include physical retail store sales and online sales via its e-commerce platform. Adairs strategically leverages its extensive network of physical stores across Australia and New Zealand, enhancing customer engagement and brand presence. Additionally, the company has developed a robust online shopping experience, catering to the growing trend of e-commerce. Adairs also benefits from its loyalty program, 'Linen Lovers,' which encourages repeat purchases and customer loyalty. Strategic sourcing and partnerships with designers and manufacturers allow Adairs to offer exclusive products, further contributing to its revenue growth.

Adairs Ltd. Financial Statement Overview

Summary

Adairs Ltd. shows solid operational efficiency and cash management, but faces challenges with revenue growth and increasing leverage. Despite these issues, the company maintains a strong equity position and profitability, although at reduced margins.

Income Statement

Adairs Ltd. has shown some revenue growth challenges, with a decrease in total revenue from 2023 to 2024. However, the company maintains a healthy gross profit margin, although it has slightly decreased from the previous year. The EBIT and EBITDA margins are strong, reflecting efficient operational management despite the revenue drop. Net profit margin has declined, suggesting some pressure on profitability.

Balance Sheet

The balance sheet indicates a stable equity base, but the debt-to-equity ratio has been increasing, indicating rising leverage. Despite this, the company's equity ratio remains solid, showing that a good portion of assets is financed by equity. Return on equity is reasonable, but has declined, reflecting the impact of reduced net income.

Cash Flow

Adairs Ltd. demonstrates strong free cash flow generation, although there has been a decline in operating cash flow. The free cash flow to net income ratio is healthy, underscoring effective cash management. However, the decline in free cash flow growth rate poses a concern for future cash generation capabilities.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	594.36M	621.34M	564.48M	499.76M	388.93M
Gross Profit	282.20M	120.12M	148.05M	157.85M	103.94M
EBITDA	126.56M	132.05M	130.22M	150.48M	102.59M
Net Income	31.09M	37.84M	44.89M	63.74M	35.28M
Balance Sheet
Total Assets	610.50M	595.95M	627.46M	414.83M	389.13M
Cash, Cash Equivalents and Short-Term Investments	12.87M	25.90M	26.07M	25.97M	23.92M
Total Debt	275.90M	279.86M	307.19M	107.19M	139.53M
Total Liabilities	387.33M	393.72M	429.57M	250.17M	248.56M
Stockholders Equity	223.16M	202.22M	197.88M	164.66M	140.57M
Cash Flow
Free Cash Flow	66.27M	96.07M	52.16M	105.52M	89.78M
Operating Cash Flow	93.68M	108.40M	61.17M	116.87M	97.31M
Investing Cash Flow	-27.41M	-12.32M	-108.16M	-11.35M	-50.04M
Financing Cash Flow	-79.24M	-96.48M	47.49M	-103.47M	-40.02M

Adairs Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:ADH, the sentiment is Negative. The current price of 2.13 is below the 20-day moving average (MA) of 2.14, below the 50-day MA of 2.45, and below the 200-day MA of 2.42, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 38.64 is Neutral, neither overbought nor oversold. The STOCH value of 47.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:ADH.

Adairs Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADH	67 Neutral	AU$376.46M	11.34	14.57%	6.10%	0.49%	-3.64%
Sector *	63 Neutral	$16.78B	10.88	-7.08%	3.04%	1.73%	-25.15%
TPLWF	―	$1.68B	321.56	5.83%	―	―	―
DSK	68 Neutral	AU$54.80M	9.51	13.17%	9.36%	5.42%	-8.87%
NCK	68 Neutral	AU$1.57B	22.72	29.48%	3.27%	9.36%	-21.69%
BLX	68 Neutral	AU$832.31M	27.85	17.54%	2.27%	5.33%	-4.25%
BBN	62 Neutral	AU$248.25M	84.19	2.78%	1.03%	-2.62%	-70.47%

Adairs Ltd. Corporate Events

Adairs Limited to Announce FY25 Financial Results

Adairs Limited announced that it will release its financial results for the fiscal year ending June 29, 2025, on August 27, 2025. The announcement includes details of an investor conference call hosted by the company’s CEO and CFO, which will provide insights into the company’s performance and strategic direction. This event is significant for stakeholders as it offers a comprehensive overview of Adairs’ operations and market positioning.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$2.00 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Limited Projects Record Sales Year Amidst Margin Challenges

Adairs Limited has provided a trading update and guidance for FY25, indicating strong sales momentum with an expected record sales year, achieving approximately 9% growth over FY24. Despite this, the company faces challenges with gross margins due to elevated promotional activity and a weaker Australian dollar. Under new leadership, Adairs is implementing significant changes to reset for long-term growth. While Adairs and Mocka are expected to show significant growth in Underlying EBIT, Focus on Furniture is expected to see a decline. The group anticipates total sales of $614 – $618 million and Underlying EBIT of $53.5 – $57.0 million for FY25.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$2.00 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.