Accent Group Posts $1.62B Sales, EBIT Holds Steady at $110M in FY25

Steady Sales and Margins Under Pressure

Accent Group Limited (ASX – AX1) closed FY25 with total sales of $1.62 billion, a modest 0.8% increase over the prior year. However, earnings showed a slight decline with EBITDA down to $288.8 million and net profit after tax slipping to $57.7 million. The company’s EBIT of $110.2 million came in at the upper end of its guidance range, reflecting disciplined cost management amid a challenging consumer environment.

Gross margins softened by 85 basis points to 54.9%, pressured by consumer demand for value and promotional activity. Despite this, Accent maintained tight inventory control, with aged stock levels stable and provisions adequate. Operating costs rose slightly, driven by inflationary pressures on rents and wages, yet the company’s ongoing cost efficiency initiatives helped contain the impact.

Strategic Brand Partnerships and Store Network Evolution

Accent strengthened its brand portfolio through extended and new distribution agreements. Notably, the Skechers deal was extended to 2035, securing a key revenue stream from over 200 stores and wholesale channels. New long-term agreements for Dickies and Lacoste were also signed, while renewals for Merrell and Timberland added stability.

The company’s store footprint remains dynamic, with 54 new stores opened in FY25 and 57 closed or divested, including 39 related to discontinued businesses. Total store count stands at 892, including digital sites. The Athlete’s Foot franchise reacquisition program progressed with 15 stores reacquired, aiming to consolidate control over the brand’s footprint.

Sports Direct Rollout and Growth Outlook

A major highlight is the ongoing rollout of Sports Direct stores in Australia and New Zealand, in partnership with Frasers Group. Accent plans to open at least 50 stores over six years, with the first store scheduled to launch in November 2025 at Fountain Gate, Victoria. Initial costs related to this rollout are expected to impact short-term profitability but are viewed as a strategic growth driver.

Looking ahead, Accent targets high single-digit EBIT growth for FY26, supported by low single-digit like-for-like sales growth, new store openings, franchise acquisitions, and growth in owned and distributed brands such as Nude Lucy and Hoka. Early FY26 trading shows a 2% increase in owned sales and a return to positive like-for-like retail sales growth, signaling momentum.

Leadership Transition and Market Position

Chairman David Gordon announced his retirement effective at the November AGM after 19 years of leadership. His tenure oversaw significant portfolio evolution and strategic initiatives like the Sports Direct partnership. CEO Daniel Agostinelli praised the team’s resilience and focus, emphasizing innovation and disciplined capital allocation as keys to future success.

Accent Group’s FY25 results reflect a company navigating margin pressures and a shifting retail landscape while laying foundations for growth through brand partnerships and new store concepts. The market will be watching closely how the Sports Direct rollout and franchise reacquisitions translate into earnings in the coming years.