Accent Group's like-for-like retail sales fell 3.9% in the first 19 weeks of FY27, with trading deteriorating further after late August. The company says its strategic initiatives are delivering benefits, but weaker demand and margin pressure have absorbed them ahead of the crucial holiday period.
- Total Group owned sales down 1.9% in the first 19 weeks
- Like-for-like retail sales fell 5.0% from weeks 8 to 19
- Wholesale sales declined 5.1% year on year
- Gross margin remained above the prior year but came under pressure
- Sports Direct rollout remains on schedule for eight stores and two websites by December
Like-for-like sales deteriorate into November
Accent Group Limited (ASX:AX1) has entered the most important part of its retail calendar with sales running below expectations. Total Group owned sales, excluding closed businesses, fell 1.9% over the first 19 weeks of FY27, while like-for-like retail sales declined 3.9%.
The deterioration has been sharper since the company's previous trading update in August. Like-for-like sales fell 5.0% across weeks 8 to 19, compared with a 0.4% decline in the prior-year comparison. Owned retail sales were down 1.5%, while wholesale sales dropped 5.1%, pointing to weakness across both of Accent's main channels.
Strategic savings offset by weaker demand
Accent attributed the softer trade to elevated fuel prices, interest rate rises and weaker consumer confidence, saying conditions deteriorated particularly in the lead-up to and following the November rate rise. Gross margin was still higher than last year at the end of October, including the benefit of foreign exchange hedging, but the company said margin had also come under pressure.
The company says the main elements of its 2030 Strategic Growth Plan have been implemented and are generating benefits in line with the plan. Those measures include closing Glue and OzSale, foreign exchange hedging, cost-of-doing-business savings and reacquiring TAF franchises. Yet the benefits have so far been offset in aggregate by weaker like-for-like sales and gross margin pressure, leaving the plan's financial contribution less visible in current trading. Accent's earlier 2030 growth plan included store expansion, cost savings and portfolio closures.
Holiday trading becomes the decisive test
Chief executive Daniel Agostinelli said the group was positioned for Black Friday, Cyber Monday, Christmas and back-to-school trading, which together cover its three largest trading months. He also said the outcome for the first half and FY27 would depend significantly on this period, while the board and management remained focused on factors within their control.
The Sports Direct rollout remains in line with the retail agreement with Frasers Group plc, with eight stores and two websites, including New Zealand, expected to be trading by the end of December 2026. That expansion is proceeding against a weaker sales backdrop, even as the earlier Sports Direct rollout remained part of Accent's growth strategy.
Bottom Line?
Accent's cost and portfolio initiatives are being tested by softer consumer demand, with the holiday and back-to-school period now carrying unusual weight for the FY27 result.
Questions in the middle?
- Can Black Friday, Christmas and back-to-school demand reverse the 5.0% like-for-like decline recorded since August?
- How much further could gross margin come under pressure if weaker sales persist?
- Will the Sports Direct rollout add meaningful momentum while the broader footwear market remains subdued?