Hope you are enjoying your Adairs investment today. It just touched a 12 month high at $2.61
I listened to the conference call. A couple of things stood out for me.
Firstly they are doing a mighty job on GP% which improved in H1 despite a 160 bps headwind in FX so this is an outstanding result.
Secondly the additional profit from upsizing stores is still working very well with greater sales from a wider stock range and better store rent metrics. Shopping Centre owners are now approaching adairs to make the upsizing easier to implement.
The move to 3PL distribution is very smart. It looks like about a 1% EBIT improvement (circa $3.5 million savings) per annum and secures the function for 10 years despite strong volume growth.
Strong sales growth in Q2 is giving us a good first 7 weeks into H2
CEO said Adairs on Coronavirus watch but limited impact to date.
Risk to H2 outlook is to the upside provided impacts of Coronavirus is managed.
Cheers..................Daicosisgod
ADH Price at posting:
$2.61 Sentiment: Buy Disclosure: Held
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