The company trimmed its guidance on Wednesday, saying it expected first-half sales of $319.5 million to $331.5 million, down from its August forecast of $324.5 million to $336.5 million, although up from the $310.5 million it achieved a year ago.
Group chief executive Elle Roseby told Adairs Limited's annual general meeting on Wednesday that Focus on Furniture had underperformed the past two years and ongoing promotions had not turned things around the way executives had hoped.
"The value proposition of the business is sound, but it needs a refresh in certain areas - not a dramatic repositioning," Ms Roseby said.
The company has added two new executives to its leadership team and accelerated store upgrades, with three-to-five refurbishments planned over the next 18 months, she said.
It still plans to open three-to-five new Focus on Furniture stores over the next 18 months, mostly in NSW and Queensland, and still sees a case for a national store footprint of around 50-to-55 stores, up from its existing 26 stores.
Adairs bought the furniture and bedding retailer for $80 million in 2021 to expand its presence into the bulky furniture market.Â
Sales growth at Adairs has also moderated, although that's because the company has pulled back on promotional activity.
Ms Roseby said the company plans to refresh the visual identity of its namesake homeware stores to a "more aspirational story of design, quality and value", and has cautiously tested a gradual shift away from its "always on" deep discounting model.
"The in-store experience is a big focus too," she said.
"We're enhancing visual merchandising and emphasising our team's styling expertise to create more rooms our customers love."
As for Adairs' digital furniture store Mocka, the company plans to open its first bricks-and-mortar store in Australia in the first half of 2026.
"Our offering is currently online led, however our customer research is clear that our customer wants to be able to also shop Mocka in a physical retail environment," Ms Roseby said.
Adairs plans to expand the trial if successful, with a view to eventually scaling to 20-to-30 stores nationally, she added.
Ms Roseby said the company is "cautiously optimistic" about the trading outlook for the rest of first half, which includes key events Black Friday, Christmas, Boxing Day and Adair's Linen Lovers Sale Event.
Adairs shares were up 9.2 per cent to a one-week high of $2.38 at midday.
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