Accent Group’s Profit Dips as Store Expansion and Brand Growth Accelerate
Accent Group reported a modest 0.8% increase in FY2025 total sales to $1.62 billion, while profits dipped slightly. The company is advancing its store expansion and brand portfolio, targeting strong EBIT growth in FY26 despite startup costs.
- FY25 total sales up 0.8% to $1.62 billion including franchisees
- Retail owned sales grew 2.5% with like-for-like sales up 0.7%
- EBITDA declined 1.7% to $288.8 million; NPAT down 3.1% to $57.7 million
- 54 new stores opened, 39 closed; network totals 892 stores
- Strategic partnerships and brand expansions underpin FY26 growth outlook
Steady Sales Growth Amid Challenging Conditions
Accent Group has delivered a modest increase in total sales for the fiscal year ended June 29, 2025, reporting $1.62 billion, up 0.8% from the previous year. This growth was supported by a 2.5% rise in retail owned sales to $1.3 billion and a 0.7% increase in like-for-like sales, despite a tough consumer environment marked by heightened promotional activity and margin pressures.
The company’s gross margin contracted by 85 basis points to 54.9%, reflecting disciplined inventory management and competitive pricing strategies. Operating expenses saw some efficiency gains, particularly in non-customer facing areas such as lease renewals and distribution costs, helping to partially offset margin compression.
Expanding Footprint and Brand Portfolio
Accent Group’s store network remains robust with 892 stores across Australia and New Zealand, following the opening of 54 new stores and closure of 39 underperforming locations, including discontinued brands like CAT and The Trybe. The company continues to invest in high-performing banners such as Hype, TAF, and Nude Lucy, the latter now operating 44 stores with consistent year-on-year growth.
Vertical owned brands have become an increasingly important contributor, generating approximately $130 million in sales, or about 9% of total owned sales. The company also extended its Skechers distribution agreement through to 2035 and is preparing to launch new distributed brands including HOKA and UGG, expected to contribute from FY26 onwards.
Strategic Partnerships and Franchise Reacquisitions
A key highlight is the strategic partnership with Frasers Group to roll out the Sports Direct brand in Australia, with the first store slated to open in Fountain Gate, Victoria, in November 2025. The rollout plan includes at least 50 stores over six years, with an online platform launching concurrently.
The Athlete’s Foot franchise reacquisition program is progressing steadily, with 15 stores reacquired in FY25 and plans to acquire the remaining 45 franchise stores over the next five years. This strategy aims to improve margin control and operational efficiencies.
Financial Performance and Outlook
Profitability saw a slight decline, with EBITDA falling 1.7% to $288.8 million and net profit after tax down 3.1% to $57.7 million. The company declared a full-year dividend of 7.0 cents per share, down from 13.0 cents the previous year, reflecting a more cautious capital return approach amid ongoing investments.
Looking ahead, Accent Group targets high single-digit EBIT growth in FY26, driven by low single-digit like-for-like sales growth, new store openings, franchise acquisitions, and growth in distributed and vertical brands. The outlook factors in startup costs associated with the Sports Direct rollout, with expectations of EBIT stability in the first half followed by growth in the second half of FY26.
Bottom Line?
Accent Group’s FY25 results set the stage for a growth-focused FY26, but margin pressures and investment costs warrant close investor attention.
Questions in the middle?
- How will startup costs for Sports Direct impact Accent Group’s profitability in FY26 and beyond?
- What is the timeline and financial impact of completing The Athlete’s Foot franchise reacquisition program?
- Can Accent Group sustain dividend payments amid ongoing store expansions and brand investments?
