The Australian share market's start to this Wednesday's trading session has been mildly positive. At the time of writing, the S&P/ASX 200 Index (ASX: JXO) has lifted 0.2% higher and is back over 8,950 points. But that's nothing compared to what's happening with Adairs Ltd (ASX: ADH) shares.
Adairs' shares are galloping higher this Wednesday. The ASX 200 homewares and furniture retailer closed at $2.29 a share yesterday afternoon. This morning, those same shares opened at $2.20 each before rocketing up to $2.57 at the time of writing. That's a gain worth a whopping 12.45%.
The catalyst for this dramatic jump was the FY2025 full-year earnings report that Adairs released this morning, before market open.
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What did Adairs report for FY2025?
For the 12 months to 30 June 2025, Adairs revealed that its group sales came in at $618.1 million. That's a 6.5% rise over the $580.4 million reported for FY2024.
Underlying earnings were $55.2 million, up 1.4% over last financial year's $54.5 million. That was helped by a 21.2% rise in the underlying earnings of the core Adairs business to $35.8 million. However, it was also hindered by a 36.6% decline in the earnings of the Focus on Furniture division to $11.8 million.
Adairs' gross margin was also down, falling 140 basis points from 60.3% to 58.9%.
Overall, Adairs reported a group net profit after tax (NPAT) of $25.7 million, and an earnings per share (EPS) metric of 14.6 cents. That NPAT metric represents a 17.9% drop from FY2024's $31.1 million. Meanwhile, Adairs' earnings per share were down 18.5% from FY2024's 17.9 cents.
That prompted management to declare a final (and fully franked) dividend of 4 cents per share for Adairs shares in FY2025. That's a 42.86% cut from last year's final dividend of 7 cents per share.
Here's some of what Adairs' CEO, Elle Roseb,y had to say on these numbers:
FY25 marked the beginning of a strategic reset for the Group. We've delivered solid top-line growth and strong EBIT results at Adairs and Mocka, while laying the groundwork for future performance improvement at Focus on Furniture. Across the Group, we're sharpening our customer focus, streamlining operations, and investing in brand, product and technology innovation…. I'm pleased with the progress we've made and optimistic about the opportunities ahead.
What's next for Adairs' shares?
Given the mixed bag of numbers we've just experienced, you might wonder why Adairs' shares are surging today. The answer might lie in the company's trading update for the first eight weeks of the 2026 financial year.
Adairs revealed that group sales over these eight weeks are up a huge 22.6% compared to the same period in FY2025. That includes growth of 26.6% for the core Adairs business, 6.7% for Focus on Furniture and 39.4% for Mocka.
Despite today's momentous share price gains, Adairs' shares are down 6.8% year to date in 2025. However, the company is up 23.7% over the past 12 months.
At the current share price, Adairs is trading on a price-to-earnings (P/E) ratio of 13.6, with a trailing dividend yield of 5.31%.
