Adairs (ASX:ADH) announced its audited financial results for the first half of fiscal year 2026.
The group achieved record total sales of $329 million, marking a 5.9% increase compared to the same period last year.
Despite this top-line growth, the company faced a mixed earnings profile as it navigated a challenging first quarter characterised by heavy clearance activity to manage excess inventory.
The group's gross profit rose 3.6% to $153.9 million, though gross margins contracted by 120 basis points to 58.7%.
Profitability metrics saw a decline, with underlying EBIT falling 9.1% to $30 million and Statutory NPAT dropping 33.8% to $12.8 million.
Statutory earnings per share fell to 7.3 cents, and the interim dividend was reduced to 5.5 cents per share.
The company reduced its net debt by 7.3%, bringing the closing balance to $53.6 million.
Managing Director and Group CEO Elle Roseby highlighted that while results across the Adairs, Mocka, and Focus on Furniture brands were varied, the "material progress" made in repositioning the business has built significant momentum for the second half of the year.
Key operational highlights include the stabilisation of margins in Q2 and the upcoming launch of Mocka’s first standalone retail store.
At the time of reporting, Adairs' share price $1.96.