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The Adairs Ltd share price jumped 20% today

The Adairs Ltd (ASX: ADH) share price jumped 20% to $0.69 after a long sell-off this year.

The homewares and furnishings company’s share price is down 72% in the past 12 months.

According to Google Finance, the company is engaged in product design, development, sourcing, and distribution and retail operations. Its product offering consists of two segments, being its core or staple product categories (Staple) and the fashion and decorator product categories (Fashion and Decorator).

Its Staple product categories include plain bed linen, bedding (pillows, quilts, underlays, mattress protectors) and towelling products. The Staple range also includes seasonal products (Christmas trim, beach towels and flannelette bed linen). Its Fashion and Decorator product categories include fashion bed linen, soft furnishings, homewares, and occasional and bedroom furniture. The Company has approximately 130 stores across Australia in five physical store formats: Adairs, Adairs Homemaker, Adairs Kids, urban home republic (UHR) and Adairs Outlets.

Shares have plunged on the back of earnings downgrades and a collapse in half year profit, despite growing sales. At a share price of $0.69, Adairs is priced at approximately 7x its forecast earnings per share of 11 cents to 13 cents per share. It could pay around a 10% annualised dividend, fully franked.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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