Accent Group Reports $817M Revenue, 40.5% Profit Drop in H1 FY26
Accent Group Limited reported a 5.3% increase in revenue to $817 million for the half-year ended December 2025, while net profit after tax fell 40.5% to $28.1 million amid margin pressures and non-recurring costs. The group declared a fully franked interim dividend and announced plans to exit its Glue retail business.
- Revenue up 5.3% to $817 million
- Net profit after tax down 40.5% to $28.1 million
- Interim fully franked dividend of 3.25 cents per share declared
- 27 new stores opened, 21 closed including Glue business exit plan
- Debt facilities extended and increased to $371.7 million
Revenue Growth Amidst Profit Pressure
Accent Group Limited has reported a solid 5.3% increase in revenue to $817 million for the half-year ended 28 December 2025, reflecting steady demand across its footwear and apparel retail operations in Australia and New Zealand. However, this topline growth was overshadowed by a significant 40.5% decline in net profit after tax, which fell to $28.1 million. The profit squeeze was primarily driven by margin compression due to a promotional consumer environment, inventory clearance strategies, and adverse currency movements impacting costs.
Operational Highlights and Store Network Changes
The group’s retail footprint remains expansive, with over 890 stores across 20 retail banners including well-known names such as Platypus Shoes, The Athlete’s Foot, Hype DC, and Vans. During the half-year, Accent Group opened 27 new stores while closing 21, notably including 12 stores from the Glue and Vans brands. The company has announced a strategic decision to exit the Glue business entirely, with the remaining 16 stores slated for closure by the end of the financial year. This move follows an impairment charge of $3.17 million related to Glue stores and reflects a disciplined approach to portfolio optimisation.
Strategic Acquisitions and Partnerships
Accent Group continued to expand through acquisitions, completing the purchase of nine The Athlete’s Foot (TAF) stores during the period. These stores contributed $6.2 million in revenue and $1.3 million in profit before tax since acquisition. The group also maintains a strategic partnership with Frasers Group plc, which includes the launch and operation of the Sports Direct retail business in Australia and New Zealand. This partnership is expected to generate royalties potentially exceeding $100 million over the initial 25-year term.
Financial Position and Dividend
The company’s balance sheet remains robust, with net tangible assets per share rising to 11.63 cents from 8.31 cents a year earlier. Accent Group extended and increased its debt facilities to $371.7 million, providing enhanced financial flexibility. The group declared an interim fully franked dividend of 3.25 cents per share, signalling confidence despite the profit decline. Cost management remains a key focus as the company navigates a challenging retail environment.
Outlook and Market Positioning
While the promotional environment and currency headwinds have pressured margins, Accent Group’s diversified brand portfolio and ongoing store expansion underpin its growth strategy. The exit from the Glue business and continued investment in core banners and new ventures like Sports Direct and HOKA suggest a strategic refocusing. Investors will be watching how the group balances growth ambitions with margin recovery in the coming periods.
Bottom Line?
Accent Group’s half-year results highlight resilience amid margin challenges, with strategic moves setting the stage for a pivotal second half.
Questions in the middle?
- How will Accent Group manage margin pressures in a promotional retail environment going forward?
- What financial impact will the full exit from the Glue business have beyond the reporting period?
- How significant will the Frasers Group partnership be in driving future revenue and profitability?
