How did the Adairs (ASX:ADH) share price respond last earnings season?

The homewares retailer will be looking for another year like last year when it releases its FY21 earnings tomorrow.

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Investors will be hoping the Adairs Ltd (ASX: ADH) share price will react the same as it did last reporting season.

The homewares retailer was a market darling last year as many Australians were ordered to stay at home.

Let's take a look at how the Adairs share price responded last earnings season.  

two people hold a sheet above their head while making a bed in a room featuring homewares.

Image source: Getty Images

Here's how the Adairs share price responded last year

The Adairs share price bolted more than 17% after releasing its full-year results for FY20.

Shares in the retailer closed 10% higher as investors digested the company's performance.

For FY20, Adairs reported a 110.5% surge in online sales of $124.2 million, which contributed 34.8% to total sales.

Overall, total sales for the company were up 12.9%, with in-store sales struggling during the pandemic.

Adairs also reported a 39.7% surge in underlying earnings before interest and tax to $60.7 million.

For FY20, the retailer also reported a 19% jump in statutory net profit after tax of $35.3 million.

The company's management highlighted the role of the pandemic in driving demand to its online platform.

For FY20, Adairs rewarded shareholders by declaring a final dividend of 11 cents per share, fully franked.

Snapshot of the Adairs share price

Adairs is a soft furnishings and homewares retailer that operates in Australia and New Zealand.

In addition to more than 160 physical stores, the company also has a strong online presence.

The Adairs share price has been relatively subdued in 2021 although is currently 12% higher since the start of the year.

After hitting a record high of $4.97 a share in late February, the Adairs share price has given back much of its gains. At the time of writing, it's sitting on $3.70.

As well as bringing forward the settlement of its Mocka acquisition, the Adairs share price has also battled against negative broker coverage.

Regardless, the company's share price still offers investors a decent dividend yield.

After reporting a solid set of results in its half-year report earlier this year, the retailer also declared an interim dividend of 13 cents per share.

Adair's potential dividend was recently acknowledged by noted broker Goldman Sachs.

According to a recent note from the broker, analysts cited the company's strong market position and omnichannel presence.

Analysts also forecast Adairs to pay a fully franked dividend per share of 26 cents in FY21.

Adairs is scheduled to release its financial results for FY21 tomorrow.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. 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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