Adairs Ltd. (ADH) AI Stock Analysis

• Market Cap: AU$335.17M
• Dividend Yield: 5.85%
• Average Volume (3M): 453.58K
• Price to Earnings (P/E): 17.5
• Beta (1Y): 1.74
• Revenue Growth: 3.99%
• EPS Growth: -18.35%
• Country: AU
• Employees: N/A
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.07
• Shares Outstanding: 177,337,050
• 10 Day Avg. Volume: 277,682
• 30 Day Avg. Volume: 453,580
• PEG Ratio: -0.86
• Price to Book (P/B): 1.63
• Price to Sales (P/S): 0.59
• 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$2.28
• Price Target Upside: 29.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.19
• Revenue Forecast (FY): AU$652.83M

• Rating: 60 Neutral
• Price Target: AU$2.00 ▲(13.64% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is driven primarily by mixed and weakening fundamentals: margin compression, higher leverage, and strained free cash flow offset modest revenue growth and stable gross margin. Technicals are neutral with only short-term improvement versus a weaker longer-term trend. Valuation is a relative positive due to the strong dividend yield alongside a moderate P/E.

Positive Factors

Stable gross margin

A consistent ~47% gross margin indicates durable sourcing and pricing discipline across product categories. Sustained gross margin provides a buffer to absorb sales volatility and supports recovery in operating profit if operating costs are controlled, aiding medium-term cash generation.

Omnichannel brand portfolio

Multiple brands and channels (physical stores, e-commerce, outlet) diversify revenue and customer reach. This structural mix supports resilience versus single-channel risk, enables cross-selling, and positions the company to capture both premium and value shoppers over the next several quarters.

Strong cash conversion ratio

A high free cash flow-to-net-income ratio shows the business historically converts reported earnings into cash effectively. That cash conversion underpins the firm's ability to fund operations, service debt, and sustain shareholder returns, even if headline earnings fluctuate.

Negative Factors

Rising leverage

Elevated debt-to-equity (~1.39) reduces financial flexibility and raises interest and refinancing risk. If operating profitability fails to recover, higher leverage can constrain investment, increase cost of capital, and force tighter cash management or asset sales to meet obligations.

Declining profitability margins

Falling net and operating margins signal pressure on core profitability from cost or pricing dynamics. Sustained margin compression lowers retained earnings, weakens ROE, and limits ability to reinvest in stores, digital or product development, making competitive position harder to defend.

Negative free cash flow growth

Negative FCF growth constrains capacity to pay down debt, fund growth initiatives, or maintain dividends without new financing. Even with decent conversion ratios, a persistent decline in FCF curtails strategic flexibility and raises vulnerability to external shocks.

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 generates revenue primarily through the sale of its homewares and textiles products, which are available in physical stores and online. The company employs a multi-channel retail strategy that includes direct sales through its branded stores and its website. Key revenue streams include product sales from bedding, furniture, and home accessories. Additionally, Adairs benefits from seasonal promotions and sales events that drive traffic and increase sales volume. The company may also engage in partnerships with suppliers and designers to create exclusive collections, enhancing its product offerings and attracting more customers, thus contributing to its overall earnings.

Adairs Ltd. Financial Statement Overview

Summary

Financial performance is pressured by declining profitability (net margin down to 4.2% and weaker EBIT/EBITDA margins), higher leverage (debt-to-equity at 1.39), and negative free cash flow growth. Revenue is still growing modestly (+2.6%) and gross margin is stable (~47%), but overall fundamentals are mixed and trending weaker.

Income Statement

Adairs Ltd. shows moderate revenue growth with a 2.6% increase in the latest year, but this is a slowdown compared to previous years. Gross profit margin remains stable at around 47%, indicating consistent cost management. However, net profit margin has decreased to 4.2%, reflecting pressure on profitability. EBIT and EBITDA margins have also declined, suggesting challenges in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.39, indicating higher leverage and potential risk if earnings do not improve. Return on equity has decreased to 11.4%, showing reduced efficiency in generating profits from shareholders' equity. The equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

Free cash flow growth is negative, indicating challenges in generating cash from operations. The operating cash flow to net income ratio is 0.53, showing moderate cash conversion efficiency. The free cash flow to net income ratio is relatively strong at 0.83, suggesting good cash generation relative to net income despite recent declines.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	636.54M	618.09M	594.36M	621.34M	564.48M	499.76M
Gross Profit	111.66M	289.30M	282.20M	120.12M	148.05M	157.85M
EBITDA	114.53M	102.36M	126.56M	132.05M	118.91M	150.48M
Net Income	19.14M	25.68M	31.09M	37.84M	44.89M	63.74M
Balance Sheet
Total Assets	641.69M	655.95M	610.50M	595.95M	627.46M	414.83M
Cash, Cash Equivalents and Short-Term Investments	12.44M	8.43M	12.87M	25.90M	26.07M	25.97M
Total Debt	463.73M	312.44M	275.90M	279.86M	307.19M	107.19M
Total Liabilities	409.79M	430.77M	387.33M	393.72M	429.57M	250.17M
Stockholders Equity	231.90M	225.17M	223.16M	202.22M	197.88M	164.66M
Cash Flow
Free Cash Flow	68.93M	65.25M	66.27M	96.07M	52.16M	105.52M
Operating Cash Flow	80.56M	78.69M	93.68M	108.40M	61.17M	116.87M
Investing Cash Flow	-11.63M	-13.45M	-27.41M	-12.32M	-108.16M	-11.35M
Financing Cash Flow	-68.58M	-69.66M	-79.24M	-96.48M	47.49M	-103.47M

Adairs Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.76
• 50DMA: Positive
• 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 Positive. The current price of 1.76 is below the 20-day moving average (MA) of 1.84, below the 50-day MA of 1.81, and below the 200-day MA of 2.15, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 54.21 is Neutral, neither overbought nor oversold. The STOCH value of 41.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:ADH.

Adairs Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSK	66 Neutral	AU$58.22M	11.88	12.71%	9.03%	8.39%	3.21%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NCK	61 Neutral	AU$1.60B	23.25	21.99%	2.63%	5.79%	-31.70%
ADH	60 Neutral	AU$335.17M	17.47	11.70%	5.85%	3.99%	-18.35%
TPW	55 Neutral	$991.06M	121.71	8.81%	―	20.66%	543.24%
BLX	55 Neutral	AU$509.14M	17.93	16.86%	2.86%	1.89%	-3.30%
BBN	54 Neutral	AU$270.80M	36.04	8.94%	―	4.72%	465.60%

Adairs Ltd. Corporate Events

Adairs posts record 1H sales as Mocka shines and resets take hold

Adairs Limited reported first-half FY26 sales of $329 million, up 5.9%, as it reset operations across its banners and exited excess inventory. Group gross margin slipped and underlying earnings weakened, with statutory NPAT down 33.8%, but sales momentum improved in the second quarter, net debt fell, and the company maintained dividends at a lower level while targeting margin and earnings recovery in the second half.

The core Adairs brand delivered modest sales growth and better Q2 profitability after aggressive Q1 clearance, while Focus on Furniture faced margin pressure from higher costs and negative like-for-like sales, prompting a leadership overhaul and store refurbishment push. Online-led Mocka was the standout, posting near-30% sales growth, higher margins, and a 45.5% jump in EBIT, and is now moving into standalone stores, signaling a strategic shift toward leveraging its strongest growth vehicle.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$2.05 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Grows Revenue but Half-Year Profit Drops, Dividend Maintained

Adairs Limited reported a 5.9% rise in half-year sales to $328.97 million for the 26 weeks to 28 December 2025, but profitability weakened as statutory net profit after tax fell 33.8% to $12.84 million. Underlying EBIT declined 9.1% to $29.96 million, indicating margin pressure despite top-line growth, and net tangible liabilities per share deepened to negative $0.21, reflecting a more leveraged balance sheet.

The board declared a fully franked interim dividend of 5.5 cents per share, with payment due on 7 April 2026 and continued operation of the dividend reinvestment plan at a 1.5% discount. The company plans to satisfy DRP commitments through the issue of new shares, supporting cash preservation while still returning capital to shareholders, and confirmed there were no changes in controlled entities and that its reviewed accounts received an unqualified audit opinion.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$2.05 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Says Late Director Interest Notice Was an Isolated Administrative Oversight

Adairs Limited has disclosed that an Appendix 3Y notice relating to a change in director Elle Roseby’s interests was lodged late with the ASX due to an administrative oversight. The company emphasized that its directors remain aware of their disclosure obligations, that the delay did not stem from any failure by Roseby to report her interests, and that a review has concluded the incident was isolated and existing compliance practices remain adequate, aiming to reassure investors and regulators about its corporate governance standards.

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 Appoints Experienced Retail Executive Matt Edmonds as Group CFO

Adairs Limited has appointed Matt Edmonds as Group Chief Financial Officer, effective 9 February 2026, adding a seasoned finance and retail executive with more than two decades of international experience across major retailers including Coles Group, Tesco and Fresh & Easy. Edmonds will oversee all group finance functions, including financial reporting, treasury and investor relations, and will also serve as Company Secretary, with outgoing CFO Ashley Gardner remaining until mid-March 2026 to ensure a smooth transition, a move that is expected to strengthen Adairs’ leadership capability as it pursues its next phase of growth and value creation in the competitive home retail market.

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 Issues FY26 Long-Term Incentive Performance Rights Tied to EPS Targets

Adairs Limited has granted 891,135 performance rights under its FY26 Long Term Incentive Plan to selected senior employees, including 312,313 rights to Managing Director and Group CEO Elle Roseby, with that portion having already received shareholder approval. The rights, priced off a 5-day VWAP of $2.68, are subject to a three-year performance period ending in June 2028 and will vest only if service conditions are met and underlying FY28 earnings per share reach Board‑set hurdles, aligning executive and senior staff rewards with improved profitability and longer-term shareholder value.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$1.50 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Grants Managing Director 312,313 Performance Rights Under FY26 Incentive Plan

Adairs Limited has granted Managing Director Narelle (Elle) Alison Roseby 312,313 performance rights under its FY26 Equity Incentive Plan, following shareholder approval at the 2025 annual general meeting. The nil-cost award, which increases Roseby’s holding to 40,322 ordinary shares and 312,313 performance rights, forms part of the company’s long-term employee incentive scheme and is intended to align executive remuneration more closely with shareholder interests.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$1.50 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs to Issue 891,135 Unquoted Performance Rights Under Employee Incentive Scheme

Adairs Limited has notified the market of the upcoming issue of 891,135 unquoted performance rights under its employee incentive scheme, scheduled for 27 November 2025. The move underscores the company’s continued reliance on equity-based incentives to align staff interests with shareholder value, potentially impacting future share dilution while supporting talent retention and long‑term performance goals.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$1.50 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Trims Potential Share Pool as 42,328 Performance Rights Lapse

Adairs Limited has notified the market of a change in its issued capital following the lapse of 42,328 performance rights, which ceased because the relevant vesting conditions were not met or became incapable of being satisfied as of 1 August 2025. The cancellation of these performance rights marginally reduces Adairs’ potential share dilution from its equity incentive arrangements, signalling that certain performance hurdles tied to executive or employee remuneration were not achieved and slightly tightening the company’s future capital base for existing shareholders.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$1.50 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Sets Date for 1H FY26 Results and Investor Call

Adairs Limited, the Melbourne-based omnichannel home furnishings and furniture retailer operating the Adairs, Focus on Furniture and Mocka brands across Australia and New Zealand, continues to focus on design-led, customer-centric retailing through its fully owned but independently run subsidiaries. The company has announced it will release its financial results for the first half of FY26, covering the 26 weeks to 28 December 2025, on 23 February 2026, accompanied by an investor and analyst conference call hosted by its chief executive and chief financial officer, with a recording to be made available on its investor relations website, underscoring ongoing engagement and transparency with the market ahead of a key trading update for stakeholders.

The most recent analyst rating on (AU:ADH) stock is a Hold with a A$2.50 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.