In This Article:
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EBIT: $80.7 million, up 11.5% year-over-year.
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Total Sales: $844.6 million, including franchisees.
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Net Profit After Tax: $47.2 million, up 11.7% year-over-year.
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Gross Margin: 55.6%, down 100 basis points.
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Cost of Doing Business: 44.7%, improved by 31 basis points.
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Owned Retail Sales: $683.5 million, with like-for-like sales up 3%.
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Vertical Owned Brand Sales: More than $65 million, up over 8%.
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Wholesale Sales: $83 million, up 1.3%.
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New Stores Opened: 42 new stores, bringing total to 903.
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Interim Dividend: $0.055 per share, fully franked.
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Like-for-Like Sales (H2 first 7 weeks): Up 2.2% year-over-year.
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Accent Group Ltd (ASX:AX1) reported a group EBIT of $80.7 million, up 11.5% from the previous year.
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The company successfully opened 42 new stores, increasing the total number of stores to 903, including online platforms.
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Vertical owned brand and product sales grew to more than $65 million, contributing to an improved gross margin.
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The company announced a fully franked interim dividend of $0.055 per share, representing a payout ratio of around 70% of the half-year EPS before non-recurring items.
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Accent Group Ltd (ASX:AX1) has signed new distribution agreements with Lacoste and Dickies, and renewed agreements with Merrell and Timberland, indicating strong brand partnerships.
Negative Points
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Gross margin percentage decreased by 100 basis points to 55.6%, due to a more promotional consumer environment.
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The company faced inflationary pressures in store team wages and annual rent reviews, impacting cost management.
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New Zealand remains a challenging market, with no significant improvement in sales performance.
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The Vans brand has been underperforming globally, although there are slight signs of improvement.
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The company is experiencing a promotional environment in lifestyle footwear, affecting margins and requiring competitive pricing strategies.
Q & A Highlights
Q: How much of the 70-basis points weakness in gross margins in the second half to-date is due to currency? Can you discuss your hedging profile and its impact on gross margins? A: Matthew Durbin, Group CFO and COO, explained that the 70 basis points weakness is not significantly attributed to currency but rather to a promotional environment. The company maintains a forward hedging profile at about 30% and does not anticipate a material currency impact on margins unless the currency drops below $0.63.