1759 ET - Australian retailer Adairs' recent improvement in its profit margins heartens Wilsons. Adairs says its gross margin expanded by some 50 basis points in the first 16 weeks of FY 2025. That was achieved despite headwinds from currency swings and freight costs. Analyst Tom Camilleri says the margin gains suggest Adairs' product costs are stable and competition is steady ahead of Black Friday and Christmas. The company also says sales in its Adairs-branded business are up 16.1% in weeks 9-16. If that growth is sustained through the peak trading periods then "it could result in meaningful margin expansion in FY 2025 (with ongoing cost discipline)," Wilsons says. It retains a market weight call on Adairs' stock. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
October 24, 2024 17:59 ET (21:59 GMT)
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