Accent Faces Margin Pressure Despite Sales Growth in FY25

Steady Growth Amid Retail Challenges

Accent Group has delivered a solid financial performance for the fiscal year ended June 2025, with owned sales rising 1.6% to $1.46 billion and net profit after tax (NPAT) reaching $57.7 million. This growth was driven primarily by a 2.5% increase in retail sales, offsetting a 5.4% decline in wholesale revenue. The company’s like-for-like sales showed a modest 0.7% increase, reflecting resilience in a challenging consumer environment marked by heightened promotional activity and cautious spending.

Strategic Store Network Adjustments

During FY25, Accent Group opened 54 new stores while closing 57, including outlets from discontinued brands and the Glue chain. This strategic pruning aligns with the company’s focus on scaling its high-performing banners such as Nude Lucy, which expanded to 44 stores, and The Athlete’s Foot. The company’s portfolio continues to evolve with a growing emphasis on vertical owned brands, which now contribute approximately 9% of total sales, underscoring a shift towards greater product differentiation and margin enhancement.

Sports Direct Launch and Partnership

A major highlight for Accent Group in FY25 was the launch of Sports Direct in Australia and New Zealand, following a long-term strategic partnership with Frasers Group plc. The first Sports Direct store and online platform opened in November 2025 at Fountain Gate, with plans for at least 50 stores over the next six years. This move signals Accent’s ambition to capture a larger share of the performance lifestyle market and diversify its brand portfolio. The company acknowledges that initial costs associated with establishing Sports Direct will impact earnings in the near term.

Outlook and Operational Focus for FY26

Trading in the first 20 weeks of FY26 shows a 3.7% increase in total owned sales year-to-date, although like-for-like sales dipped slightly by 0.4%. Gross margins have contracted by 1.6% compared to the prior year, reflecting ongoing margin pressures. Accent Group has implemented cost efficiency initiatives, particularly in non-customer facing areas such as lease renewals and distribution. The company’s EBIT guidance for FY26 ranges from $85 million to $95 million, factoring in non-recurring losses and the ramp-up costs of Sports Direct. The focus remains on expanding growth brands and leveraging omnichannel capabilities to drive future performance.

Sustainability and Corporate Responsibility

Accent Group continues to embed sustainability into its operations, with initiatives spanning ethical sourcing, modern slavery reporting, and extensive customer shoe recycling programs. The company is preparing to meet new carbon reporting standards in FY26 and maintains active membership in packaging compliance schemes. Diversity and inclusion efforts are evident, with a 67 – 33 female-to-male ratio among employees and 30% female representation on the board, reflecting a commitment to responsible business practices alongside growth ambitions.