Accent Group (AX1) H2 2024 earnings summary

Executive summary

• Total sales for FY24 reached AUD 1.61 billion, up 2.7% year-over-year, with net profit after tax of AUD 59.5 million, down 32.9% due to non-recurring store transition and impairment charges.

• Opened 93 new stores, expanding the network to 895, and grew the customer database to 10.2 million, with loyalty program membership at 8.1 million.

• Retail sales grew 6.3% year-over-year, while wholesale sales declined 16.9%.

• Divested The Trybe business and exited 17 underperforming Glue Stores to focus on higher-growth banners.

• Board renewal continued with two new directors appointed and ongoing focus on succession planning.

Financial highlights

• Total sales for FY24 were AUD 1.61 billion, up 2.7% year-over-year (52 weeks vs. 53 weeks prior).

• EBIT was AUD 110.4 million, down 20.5% year-over-year, including a AUD 17.3 million non-recurring charge for Glue Store exits.

• Net profit after tax was AUD 59.5 million, down 32.9% year-over-year.

• Gross margin improved to 55.8%, up 58–60 bps year-over-year, aided by a higher retail mix and disciplined inventory management.

• Cost of doing business (CODB) rose to 45.9% of sales, up 138–140 bps year-over-year, mainly due to inflation in rents and labor.

• EBITDA was AUD 293.7 million, down 1.5% year-over-year.

Outlook and guidance

• At least 50 new stores planned for FY25 across core and new banners.

• Further growth expected in online sales, loyalty programs, and vertical/distributed brands.

• Trading update: first seven weeks of FY25 saw total sales up 8.7% and like-for-like retail sales up 3.5% year-over-year.

• Operational cost efficiency program initiated to improve CODB through FY25-27.

• Fully franked final dividend of AUD 0.045 per share announced, payable 26 September 2024.