Accent Group (ASX: AX1) Delivers Solid H1 FY25 Results Amid Challenging Retail Conditions

Accent Group (ASX: AX1) has posted a strong first-half performance, reporting sales growth, higher profits, and continued expansion despite a tough retail environment. The Group delivered an 11.5% increase in EBIT to $80.7M, with net profit after tax (NPAT) hitting $47.2M. Investors will be pleased to see a fully franked interim dividend of 5.5 cents per share, reinforcing the company’s commitment to shareholder returns.

Key Financial Highlights

  • Total sales: $845M (+4.2% YoY)
  • EBITDA: $158.3M
  • EBIT: $80.7M (+11.5% YoY)
  • NPAT: $47.2M
  • EPS: 8.35 cents
  • Interim dividend: 5.5 cents (fully franked)
  • Total stores: 903 (after opening 42 new stores in H1)

Retail Growth & Strategy Execution

CEO Daniel Agostinelli highlighted the company’s ability to grow sales and profit despite challenging consumer spending conditions:

“The growth in sales and profit reflects the strength of the Accent business model and the ongoing drive of the entire team. We successfully managed inventory and costs while navigating a more promotional retail environment.”

Some of the key operational wins included:

  • Like-for-like (LFL) sales up 2.9%
  • Cost of Doing Business (CODB) improved to 44.7% (from 45.0% in H1 FY24)
  • Strong performances from key brands: The Athlete’s Foot (TAF), Hype DC, HOKA, Stylerunner, and Nude Lucy
  • New distribution agreements signed for Lacoste & Dickies (expected to contribute from FY26)
  • Renewed long-term agreements for Merrell & Timberland

Expansion & Future Growth Plans

Accent Group is actively expanding, with plans to open 10+ new stores in H2 FY25. The company is also focused on strengthening its portfolio:

  • Nude Lucy – Now has 40 stores and continues to resonate with customers.
  • Stylerunner – Opened 7 new stores in the last 12 months, with more planned.
  • TAF Franchise Buyback – Acquired 5 stores in H1, with 10 more planned for H2.
  • Wholesale Business – Started strong in Q1 but became more challenging through H1.

Dividend & Outlook

The 5.5-cent interim dividend (fully franked) will be paid on 20 March 2025 to shareholders registered by 6 March 2025. The ~70% payout ratio highlights Accent Group’s focus on rewarding shareholders while reinvesting for growth.

Looking ahead, the company remains bullish on expansion, with new store rollouts, brand growth, and increased distribution agreements set to drive future performance. While promotional retail pressures may persist, Accent Group has proven its ability to navigate challenges while delivering profitability and growth.