"Dumpster fire that was their online offering during the last half"...so much for being a leading omni-channel retailer. 2022 and still no click and collect, up to 7 days for order dispatch. Mocka "significantly impacted by customer delivery challenges"...corporate spin for it was a total clusterf**k. You burn so much customer goodwill when you just can't execute a decent online shopping experience, covid challenges notwithstanding.
Meanwhile the store network remains under pressure. -14% pcp but importantly only +10% on the two-year stack, slowing to +4% LFL in Jan-Feb. That's pretty poor when considering other home retailers are still +20-30% on a two-year stack. +80% online is good but not exceptional. Focus sales slowing literally right after the deal closed...
Gross margins held up well in Adairs but collapsed for Mocka, leading to reverse operating leverage with +23% sales growth translating to -19% earnings...
It was a poor half overall, no way around it. Let's see if it's just a temporary blip or the start of something more dire.
ADH Price at posting:
$2.97 Sentiment: None Disclosure: Held
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