Accent Group’s profit sprints ahead

Retailer Accent Group’s shares soared 17 per cent with better than expected sales momentum and gross margins, although it warned of ‘ongoing uncertainty’.

A 24 per cent lift in sales helped deliver footwear and clothing retailer Accent Group a record profit in 2022-23 but it has warned of softening sales.

Shares in the retailer, which owns The Athlete’s Foot, Hype and Skechers among other brands, rose 17 per cent to $2.16 as net profit after tax reached $88.7m, up 182 per cent, for the 53 weeks to July 2. It was buoyed by better than expected sales momentum and gross margins. CEO Daniel Agostinelli acknowledged the “ongoing uncertainty” in the economic outlook.

“Like others we have experienced softening sales across May and June and into the first seven weeks of this year, with apparel being softer than footwear,” he said.

“We continue to be pleased with the trading strength in a number of our banners where lower prior year comps and product innovation have driven positive LFL retail growth. We are also pleased with the Group’s gross margin percentage achieved to date.”

The Melbourne-based business, which released its financials after the market closed late on Thursday, recorded $1.57bn of total sales in 2022-23 up 24 per cent and a gross margin of 55 per cent, up 100 basis points. Earnings per share jumped to 16.2c compared to 5.81 cents in the prior year.

A fully franked final dividend of 5.5c per share was declared bringing dividends for year to 17.5c per share well up on the 6.5c per share the previous 12 months.

A Hype DC store at Westfield Miranda.

Mr Agostinelli said the continued focus on customers, new product, and return on investment has delivered a record result and continues the journey of growth in profit and shareholder returns that has seen profit growth achieved in five of the last six financial years.

“I am pleased with the progress that has been made on our key growth strategies as we continue to build a strong, defensible business in Australia and New Zealand,” he said.

The company has 821 stores including websites and 34 brands. Strong sales were achieved across all major banners including Platypus, Skechers, TAF, Hype DC, Vans and Dr Martens.

As trade softened in May and June, Skechers, TAF and Hype DC in particular continued to experience positive comp store sales growth.

Contactable customers grew by 500,000 to 9.8 million customers and sales of vertical owned brands of more than $100m.

Nude Lucy is a fast-growing, women’s lifestyle apparel brand that has experienced significant growth, with 22 new stores rolled out over the last 18 months.

Accent said it would roll out at least 50 new stores in 2023-24.