ACCENT GROUP DELIVERS RECORD H1 FY23 PROFIT1
FINANCIALS AND PERFORMANCE HIGHLIGHTS
Total sales2 of $825 million, up 39% on the prior year
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $170.2
million, up 70.9% on the prior year.
Earnings Before Interest and Tax (EBIT) of $91.2 million, up 201% on the prior year.
Net Profit After Tax (NPAT) of $58.3 million (H1 FY22, $14.8 million).
Earnings Per Share (EPS) of 10.7 cents (H1 FY22, 2.73 cents).
A fully franked interim dividend of 12.00 cents per share.
Inventory aged stock levels clean.
Net debt of $63.6 million (H1 FY22, $90.3 million).
Accent Group Limited (ASX: AX1) (Accent Group, Group or Company) today reports EBIT
of $91.2 million and NPAT of $58.3 million for the 27 weeks ended 1 January 2023 (H1 FY23).
Accent Group CEO, Daniel Agostinelli, said “I am delighted with the results achieved in H1
FY23. The continued focus on customers, new product, full margin sales and return on
investment has delivered a terrific H1 result.
What is most pleasing is the strength and consistency of performance across our large core
banners, including Skechers, Platypus, Hype DC, The Athlete’s Foot (TAF), Vans and Dr
Martens, along with the progress that we have made in our new banners now that trading
conditions have normalised.
One of the key initiatives for H1 was driving the profitability of the Accent Group digital
business. Overall online sales have grown 160% to $134 million compared to FY20. Whilst
sales were down on last year due to the lockdowns in 2021, we have improved our digital
business and online EBIT was ahead of last year.”
1 Financial results for the 27 weeks ended 1 January 2023, presented on a statutory post AASB 16
basis unless otherwise noted. The Company estimates that the impact of week 27 was around $36
million in sales, and around $10 million in marginal EBIT contribution
2 Includes The Athlete’s Foot Franchise sales
2
OPERATING REVIEW
• Total owned sales3 of $746.5 million up 42.1% to prior year
• Total online sales4 of $134 million contributed 18.9% of total retail sales. Online EBIT
was ahead of the record achieved in H1 FY22 on lower sales.
• Gross margin of 55.2% up 190 basis points to prior year. Good progress continues to
be made in strengthening our gross margin through our distributed and owned vertical
brands. Gross margin rate in H1 was impacted by currency and clearance of
discontinued brands.
• CODB % of 42.0% well managed with an improvement of 470 basis points to prior year.
• Strong sales results were achieved across all our core major banners including Platypus,
Skechers, TAF, Hype DC, Vans and Dr Martens.
• Supply chain impacts have normalised with strong deliveries of new release product
supporting sales growth.
• During H1 the Group opened 53 new stores, transitioned 13 stores from discontinued
into continuing brands and closed 10 stores where required rent outcomes could not be
achieved. Total store numbers are now 805 stores.
• Contactable customers grew by 300,000 to 9.6 million customers, loyalty program
membership now 7.4 million across TAF, Hype DC, Platypus, Merrell, Skechers.
• Sales of vertical owned brands of more than $50 million (around 7% of owned sales).
• Glue Store and Stylerunner both generated positive EBIT for H1.
• 15 Nude Lucy concept stores with strong early results. Nude Lucy is a fast-growing,
lifestyle apparel brand that was acquired as part of the Glue Store transaction. Based on
the success of this brand within Glue Store, external wholesale customers and the
successful trial of a standalone retail concept, the next phase of store roll-out has
commenced.
DIVIDEND
Interim dividend of 12.00 cents per share fully franked to be paid on 9 March 2023 to registered
shareholders as of 1 March 2023.
3 Owned sales exclude The Athlete’s Foot Franchise sales
4 Includes The Athlete’s Foot Franchise online sales
3
GROWTH PLAN UPDATE
Accent Group continues to pursue a range of growth opportunities across its core banners
and new businesses, including:
• The continued roll-out of new stores, with a least 20 new stores planned to open in H2
FY23. The Company sees a continued store roll-out opportunity in both its core
banners and new businesses.
• Growth from a planned roll-out of Nude Lucy stores.
• Profit growth in Glue Store and Stylerunner through continued operational
improvement and as the vertical programs in these businesses grow.
• Profit growth in TAF from margin expansion, with franchise stores continuing to be
acquired (current network of 91 corporate stores and 65 franchise stores).
• Growth in digital and customer loyalty programs driven by improvement in customer
spend frequency, with loyalty program now launched in Platypus, Hype DC and
Skechers, driving repeat spend behaviour and improved customer value.
In summary, Accent Group continues to grow in scale and customer reach. The business
remains well positioned for future growth through continued expansion in new retail stores,
the introduction of new categories including youth and active apparel, continued growth in
wholesale, a continuing drive to improve underlying gross margin, and ongoing investments
in digital and customer data.
TRADING UPDATE
Trading conditions for the first 7 weeks of H2 have been positive.
Like-for-like sales (LFL) 5 for the first 7 weeks of H2 (2 January - 19 February) are up 16% on
the prior year, for the 8 weeks from 26 December – 19 February (which includes week 27)
LFL sales are up 23.9% to prior year. Compared with FY20, LFL sales for the first 7 weeks
are up 16.1%, a compound annual growth of 5.1%.
Mr Agostinelli said “Whilst we recognise that there is some uncertainty in the economic
outlook, to this point we have not yet seen any significant change to consumer spending in
our categories. Many of our brands target a younger customer demographic who tend to be
less impacted by interest rates and cost of living pressures.
In conclusion, I am pleased with the ongoing progress that has been made on our key growth
strategies as we continue to build a strong, defensible business in Australia and New Zealand.
Our portfolio of global distributed brands, owned vertical brands, integrated digital capability
and large store network are core assets of the Group and position the Company well for growth
into the future.”
5 Like for like (“LFL”) retail sales include TAF Franchises sales, digital sales and Glue stores. The LFL
measurement is consistent with prior releases and includes the year on year sales comparison for all
stores in which a sale has been recorded on the same day the prior year.
4
For further information contact:
Investors
Matthew Durbin
Chief Financial and Operating Officer
matthew.durbin@accentgr.com.au
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DYOR
i hold AX1 'free-carried' ( bought as RCG )