Adairs has told investors that it expects to record a $43 million loss for fiscal 2026, with signs of recovery being blighted by falling sales at its Focus on Furniture brand.

The homeware retailer has long been in the throes of a reset strategy that has seen it cease operations in New Zealand, invest $30 million in upgrading remaining stores, and undergo a digital transformation.

This strategy is being felt on the balance sheet, but – despite the expected losses – Adairs said it is seeing an uplift in its sales. New guidance expects full-year sales across the group to fall between $640 million and $641.5 million. While this would be a 3.7 per cent increase on the previous year, with Mocka sales expected to jump by 22.1 per cent, sales at Focus on Furniture are set to fall by 5.7 per cent.

At the same time, Focus on Furniture’s earnings are forecast to fall by 68.3 per cent.

For its namesake brand, Adairs said the new concept store at Bondi Junction has delivered “encouraging results”.

“The store renewal program is now expanding into a broader refurbishment programme across small, medium and large store formats, applying the lessons from Bondi Junction across the network,” the group added. 

It also said that its exit from the “small, loss-making region” of New Zealand will incur costs between $3.5 million and $4 million.

The “challenging year” of Focus on Furniture was put down to intense promotional activity from competitors, conversion challenges, underperforming products, and failures to execute.

“A new management team has been appointed progressively throughout the year and is rebuilding the business across product, marketing, retail execution and operating processes,” the group said, adding that it is implementing a new programme of improvements to “re-platform the business for growth”.