Accent Group shares ended the week strongly after initially bombing following an update on trade and growth plan progress on Friday.
The $1.5 billion retailer and distributor of performance and lifestyle footwear across Australia and New Zealand, highlighted that since the re-opening of New South Wales and Victoria, the company has experienced a strong spike in sales and improved gross margins, ahead of key Cyber, Christmas and Back-to-School trading periods.
Trade for the first 18 weeks ended 31 October was significantly impacted by store closures, which across Australia and New Zealand impacted more than 60% of the company’s store portfolio of more than 400 stores, with a subsequent impact to sales and margins. The impact on owned retail sales (including digital) for the first 18 weeks was $86 million, resulting in Group EBIT being approximately $40 million below the original management plan for the first 4 months of the year.
However, sales results since the re-opening of NSW and Victoria have been strong. Over the last 4 months the company has also continued to invest in the key growth strategies, including 63 new stores opened in the first 20 weeks to 14 November, with 700 stores currently trading, and more than 120 more expected inFY22.
Given the ongoing uncertainty around trading conditions due to COVID-19, the company refrain from providing any forward guidance.
Group CEO Daniel Agostinelli said “Accent Group’s sales and gross margins for the first 18 weeks ended 31 October were significantly affected by government-mandated store closures. During that period, there was also a significant focus on controllable costs and targeted promotional activity ensured that inventory remains well managed. I am pleased to say that we have exited this period “Match Fit”, with our stores, team and inventory in great shape to take advantage of the key Cyber, Christmas and Back-to-School trading periods.”