Adairs has now issued a sales and profit warning for the full year... And adjusted their forecast downwards.
👉 Background: Adairs is the Melbourne-based home furnishing company that’s been keeping bedrooms stylish since 1984. It also owns other homewares and furnishings chains, like Focus on Furniture and Mocka.
👉 What happened: But, Adairs' fortunes have taken a turn - they've announced a significant drop in sales since the start of this year. In fact, Adairs has now issued a sales and profit warning for the full year... And adjusted their forecast downwards.
👉 What else: Initially, they thought earnings would be between $70 million - $80 million. But now, we're looking at a majorly reduced $62 million - $65 million. And no surprises here, its share price dropped more than 18% after the profit warning.
💡A profit warning is a public statement made by a listed company to its investors. And there's no such thing as a positive profit warning. It's basically a message to investors that future earnings aren't on track to meet earlier forecasts.
💡Since investors buy and sell shares based on forecasts, the profit warning generally has a negative impact on the share price.
💡And since Adairs has blamed external factors like higher rent and tightened consumer spending, it doesn't look like there's a quick way out of this one.
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