Accent Group shares tumble after softer sales, margin
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More news: Accent Group shares plunged in early trading on the ASX after the fashion retailer saw its gross margin trimmed at the start of FY25.
Accent shares fell 12.7% to $2.21 by 10:40am AEDT, having gained around 30% over the last 12 months.
E&P retail analyst Kade Madigan noted that year-to-date sales and gross profit margin are "a bit softer" than forecasts, but Accent's cost control is "slightly better" than expected. First-half store openings guidance is also ahead of E&P's projections, he said.
Madigan flagged that Accent's update suggests the company is trading "slightly behind" consensus EBIT growth forecasts of around 10%, but Black Friday and Christmas over the next six weeks are expected to drive a "significant amount" of first-half profitability.
Accent Group sees year-on-year sales boost but margins slide
The news: Fashion retailer Accent Group notched an increase in sales at the start of FY25 but saw its margin hit by sector-wide promotional trading.
The numbers: The Athlete’s Foot and Hype DC chain owner recorded a 6.8% rise in total sales for the first 20 weeks of FY25, with like-for-like retail sales up 3.5%.
For the first 18 weeks of the new financial year, Accent's gross margin fell 70 basis points compared with the same period last year, impacted by increased promotional trading across the sector.
Accent also said that its new store opening program is on track and the company expects to open around 40 new stores in the first half of FY25. Meanwhile, the planned closure of 17 underperforming Glue stores is progressing, with eight closures to date.
The context: The company said that for the rest of the financial year, it aims to continue the roll-out of new stores, improve the underlying gross margin from its distributed and vertically owned brands, grow its women's fashion brand Nude Lucy, secure operational improvement in Glue Store and Stylerunner, achieve profit growth from The Athlete's Foot, and continue growth in digital sales.
Ahead of its annual general meeting today, Accent also announced its intention to appoint former Sports Direct chief executive and Frasers Group's regional general manager Dave Forsey to its board. London-listed retailer Frasers acquired a 14.65% strategic stake in Accent in August.
The sources: ASX announcement, ASX announcement, E&P Capital research
