The ASX dividend stock Adairs Ltd (ASX: ADH) is projected to pay a huge yield to investors in the next few years. Forecasts aren't necessarily going to turn into reality, of course.

But, with the company's willingness to reward long-term shareholders, I think the dividend could climb in the coming years if the profit rises.

Adairs is a furniture and homewares retailer through Adairs, Mocka and Focus on Furniture. The business is working on growth initiatives like increasing store numbers, expansion of existing stores, growing its membership numbers and so on.

Let's see what the short-term and longer-term dividends could be.

This year, FY25

There's not long to go in the 2025 financial year, but this is shaping up to be a solid year for dividends.

In the recent FY25 half-year result, Adairs' board increased the payout by 30% to 6.5 cents per share following an 8.5% increase of statutory earnings per share (EPS) to 11.1 cents.

The ASX dividend stock gave a promising update for its sales in the first seven weeks of FY25, with group sales up 9.2%. Adairs said its sales "continue to maintain positive momentum, supported by improved inventory availability and attractive differentiated product ranges." The company is also expecting further improvements in warehousing efficiency and service to support sales and profitability.

According to estimates on Commsec, the business is projected to pay an annual dividend per share of 13 cents in FY25. That would translate into a grossed-up dividend yield of 8.5%, including franking credits. For most businesses, that would be a very good yield. But more is expected in the coming years.

Longer-term, FY27 payout

There seems to be a general expectation that Australian interest rates are going to come down further. This could help household budgets and discretionary spending recover, which in turn could push Adairs' profit higher.

The projections on Commsec suggest a possible 37% increase of EPS between FY25 and FY27, to 29.6 cents. A lot could happen between now and then – the ASX dividend stock's recovery could be stronger than expected, or not as good.

According to the forecast on Commsec, Adairs could pay an annual dividend per share of 19 cents. This would translate into a forward grossed-up dividend yield of around 12.5%. If that projection comes true, Adairs could be a very rewarding stock to own in FY27. Time will tell how large the payout ends up being.