Shares in manchester company Adairs are going nuts

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Adairs has proved that sheets and pillow slips can defy the retail crunch.

The manchester company’s shares are up by almost a third after updating its earnings forecasts.

A short time ago, Adair shares were up 31.5% to $1.25.

Adairs, which made a poor start to the year, now expects sales for the second half be up 8.3% to $140.4 million and the full year to be $264.9 million.

Underlying EBIT (earnings before interest and tax) for the second half is expected to be between $18.5 million and $19 million with the full year between $30.5 million and $31.0 million.

Like-for-like sales have been trending upward, as this chart shows;

Source: Adairs

“The issues observed in our key bed linen category in the first half of FY17 have largely been resolved, with the category again delivering like-for-like sales growth,” says CEO Mark Ronan.

“While we are pleased to see sales in the bed linen category improve, we continued to see higher than usual sales variability across our store formats, centre types, product categories and geographies.

“This is perhaps symptomatic of a more subdued retail environment, but also indicates further room to improve our product and store execution.”