Strong results from Adairs
Adairs, a publicly listed Australian mid-tier bedding, towels, and linen retailer provided a trading update, with the expected sales for the financial year to be in excess of A$310 million and EBIT of approximately A$45 million, i.e. 14.5%. The business operates in excess of 160 stores, mainly in Australia, competing against department stores and similar operators such as Bed Bath & Table, Sheridan and Pillow Talk. The share market responded favourably. A word of caution about businesses that EBIT in excess, while fantastic, it acts like a honeypot, attracting competitors to the market. So, in the medium to long-term, it is better to spend more on strengthening the business rather than to keep the extra profit.