Accent Group shares dive on slowing sales, thinner margins

The footwear retailer released a trading update at its annual general meeting that showed a marked slowdown in sales growth and weaker margins.

The nation’s largest footwear retail owner Accent Group is experiencing weaker sales growth. Picture: NewsWire / Max Mason-Hubers

Shares in Accent Group, the nation’s largest footwear retailer, plunged more than 11 per cent on Thursday after the owner of chains such as Hype, Glue and Platypus released a trading update at its annual general meeting that showed a marked slowdown in sales growth and weaker margins.

The share price collapse also came three months after retail billionaire Brett Blundy cashed in his entire stake in Accent Group for $160m, handing the biggest stake in the company to Britain’s Frasers Group.

Now the slowing sales and dropping share price will be Frasers’ problem, as difficult trading conditions and a pull back in consumer spending due to cost-of-living pressures sees a harder sell for footwear chains and footwear brands.

In its trading update Accent said for the first 20 weeks of fiscal 2025, total group-owned sales (including wholesale sales) were up 6.8 per cent while like for like retail sales were up 3.5 per cent.

The total sales growth was a slowdown on the sales growth in the first seven weeks of 2025 of 8.7 per cent, while like for like sales growth of 3.5 per cent was in line with the sales trajectory of the first seven weeks of the financial year.

Accent also said in its trading update that to the end of October gross margin was down 70 basis points compared with the comparable period last year, impacted by a more promotional trading environment. It said the continued focus on cost of doing business improvement was gaining traction with costs to sales an improvement to last year inclusive of the impact of restructure costs for the support team.

“We continue to observe that customers are responding to promotion and value offers with an associated impact to gross margin,” chief executive Daniel Agostinelli said.

E&P retail analyst Kade Madigan said overall year to date sales and profit margin were “a bit softer”, but that cost control was slightly better than expected.

“Whilst trading update comments suggests Accent is trading slightly behind this run rate, we note the next six weeks (Black Friday and Christmas) drive a significant amount of first half profitability.

“Thus, we don’t expect material changes to analyst consensus.”

Accent shares closed at $2.25, down 28c.