Adairs Ltd. (ADH) AI Stock Analysis

• Market Cap: AU$315.66M
• Dividend Yield: 5.85%
• Average Volume (3M): 453.58K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 1.76
• Revenue Growth: 3.99%
• EPS Growth: -18.35%
• Country: US
• 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$2.67
• Price Target Upside: 51.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: AU$2.00 ▲(13.64% Upside)

Adairs Ltd. receives a moderate overall score due to financial challenges, including declining profitability and increased leverage, which are significant risks. The technical analysis indicates bearish momentum, further weighing on the score. However, the stock's valuation is reasonable, with a fair P/E ratio and an attractive dividend yield, providing some support to the overall assessment.

Positive Factors

Multi-channel retail model

A diversified retail model (stores + e-commerce) supports durable revenue streams and customer reach. Over 2-6 months this reduces reliance on any single channel, aids inventory turnover and cross-selling, and helps preserve market share amid shifting consumer preferences.

Stable gross profit margin

A consistent ~47% gross margin indicates sustained pricing power, supplier terms, and product mix control. This structural margin cushion helps absorb operating cost pressures and supports long-term earnings resilience even if operating expenses fluctuate.

Positive revenue growth

Continued top-line growth, albeit modest, signals persistent consumer demand and supports scale benefits in sourcing and distribution. Over several months this revenue momentum enables modest reinvestment in omnichannel capabilities and product development without requiring structural changes.

Negative Factors

Rising leverage

Elevated debt-to-equity (1.39) raises structural financial risk: higher interest burden and reduced flexibility to fund capex or weather demand shocks. If earnings remain weak, leverage can amplify downside and force constrained capital allocation for months ahead.

Compressed profitability margins

Declining net and operating margins signal weakening operational efficiency or rising costs. Structurally lower margins reduce retained earnings and cash available for reinvestment, making it harder to fund growth or service higher debt without operational improvement.

Weakened cash generation

Negative FCF growth and a 0.53 operating cashflow-to-net-income ratio indicate strained cash conversion. Over the medium term this limits internal funding for inventory and store investments, may increase reliance on external financing, and heightens refinancing and liquidity risk.

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

Adairs Ltd. faces challenges with declining profitability and increased leverage, which could pose risks if not addressed. While revenue growth is positive, margins have compressed, impacting overall profitability. The balance sheet shows increased debt levels, which could pressure financial flexibility. Cash flow generation is under strain, but the company maintains a reasonable conversion of net income to cash. Overall, Adairs Ltd. needs to focus on improving operational efficiency and managing leverage to enhance financial stability.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	618.09M	618.09M	594.36M	621.34M	564.48M	499.76M
Gross Profit	198.53M	289.30M	282.20M	120.12M	148.05M	157.85M
EBITDA	94.35M	102.36M	126.56M	132.05M	118.91M	150.48M
Net Income	25.68M	25.68M	31.09M	37.84M	44.89M	63.74M
Balance Sheet
Total Assets	655.95M	655.95M	610.50M	595.95M	627.46M	414.83M
Cash, Cash Equivalents and Short-Term Investments	8.43M	8.43M	12.87M	25.90M	26.07M	25.97M
Total Debt	312.44M	312.44M	275.90M	279.86M	307.19M	107.19M
Total Liabilities	430.77M	430.77M	387.33M	393.72M	429.57M	250.17M
Stockholders Equity	225.17M	225.17M	223.16M	202.22M	197.88M	164.66M
Cash Flow
Free Cash Flow	65.25M	65.25M	66.27M	96.07M	52.16M	105.52M
Operating Cash Flow	78.69M	78.69M	93.68M	108.40M	61.17M	116.87M
Investing Cash Flow	-13.45M	-13.45M	-27.41M	-12.32M	-108.16M	-11.35M
Financing Cash Flow	-69.66M	-69.66M	-79.24M	-96.48M	47.49M	-103.47M

Adairs Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 1.76 is below the 20-day moving average (MA) of 1.81, below the 50-day MA of 1.81, and below the 200-day MA of 2.21, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 46.42 is Neutral, neither overbought nor oversold. The STOCH value of 18.21 is Positive, 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
DSK	66 Neutral	AU$56.04M	12.73	12.71%	9.03%	8.39%	3.21%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NCK	59 Neutral	AU$2.19B	37.92	21.99%	2.63%	5.79%	-31.70%
ADH	58 Neutral	AU$315.66M	12.18	11.70%	5.85%	3.99%	-18.35%
BBN	56 Neutral	AU$335.79M	35.08	8.94%	―	4.72%	465.60%
BLX	55 Neutral	AU$614.64M	20.76	16.86%	2.86%	1.89%	-3.30%
TPW	54 Neutral	AU$1.64B	143.07	8.81%	―	20.66%	543.24%

Adairs Ltd. Corporate Events

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.

Adairs Limited Announces CFO Transition

Adairs Limited announced the departure of its Group Chief Financial Officer, Ashley Gardner, who will leave to pursue a new opportunity. Gardner has been instrumental in strengthening the company’s financial and operational foundations and driving its M&A activities. The company will begin searching for a successor to ensure a smooth transition, highlighting the importance of maintaining its strategic growth momentum.

The most recent analyst rating on (AU:ADH) stock is a Buy with a A$2.60 price target. To see the full list of analyst forecasts on Adairs Ltd. stock, see the AU:ADH Stock Forecast page.

Adairs Ltd. Announces Cessation of Performance Rights

Adairs Ltd. announced the cessation of 1,477,121 performance rights due to the lapse of conditional rights, as the conditions were not met by June 30, 2025. This cessation could impact the company’s financial structure and stakeholder interests, as it reflects on the company’s performance metrics and strategic execution.

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.

Adairs Director Increases Stake with Significant Share Acquisition

Adairs Limited announced a change in the interest of its director, Rachel Kelly, who acquired 32,500 fully paid ordinary shares on the market, valued at $71,065.28. This acquisition reflects a significant personal investment by the director, potentially signaling confidence in the company’s future performance and stability, which may positively influence stakeholder perceptions.

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.