Christmas delivered. February didn't. Ragtrader analyses what the reporting round says about where Australian fashion retail heads into Black Friday.
Australian fashion retail held its ground through 2026 where it counts most. On the trading floor.
Comparable sales came in positive or close to flat almost everywhere and Christmas delivered. What moved was further down the line, on gross margin and on the cost of getting a sale over the counter. The turn arrived in February and the businesses that had already taken cost out are the ones that came through it in better shape.
Accent Group is the clearest version of the pattern. The footwear group went into February with first-half sales of $865.2 million and like-for-like retail growth of 0.9 per cent, split between a first quarter down 1.7 per cent and a second quarter up 2.8.
"In a promotional trading environment, growth was achieved across many of our businesses," chief executive Daniel Agostinelli said at the time, pointing to The Athlete's Foot, HOKA, Merrell and Nude Lucy.
By August the picture had changed. Like-for-like sales finished the year at minus 0.5 per cent after a second half down 2 per cent, with the company reporting that the June quarter was "materially impacted by the escalation of geopolitical tensions" and a significant deterioration in consumer confidence.
Underlying EBIT of $105.3 million still beat the midpoint of guidance. The statutory line did not survive intact, with a $48.6 million non-cash goodwill impairment producing a $13.8 million loss and the dividend cut to 4.5 cents from 7 cents.
What held the rest together was subtraction. Closing OzSale and Glue removed roughly $17.8 million of annualised losses while cost of doing business improved a full percentage point to 45.6 per cent of sales. All of it now plays out under Frasers Group's 65-cent on-market offer, extended to 30 September.
Country Road Group ran the opposite experiment and it worked. Group sales rose 1 per cent for the year to 28 June, with the second half down 0.5 per cent, and that flat top line is the point.
Fewer promotions and more full-price selling lifted gross margin to 57.7 per cent from 56.4 per cent, while the loss narrowed to around $21 million from roughly $124 million a year earlier.
Parent Woolworths Holdings was blunt about the backdrop it traded into, reporting that "the sector remains intensely promotional, as retailers reduce excess inventory levels".
Country Road traded marginally ahead of last year while Witchery and Politix ran well up on repositioned ranges, and none of that came from new space or a bigger online mix. The recovery was in how the group sold rather than where.
Kathmandu is the strongest performer of the round and the same logic holds. Sales lifted 12.3 per cent in the first half and 12.0 per cent in the third quarter, but the gain that matters is on margin.
Group gross margin reached 58.2 per cent in the third quarter, up around 258 basis points year on year, with Kathmandu's own margin up 233 points on better product mix and tighter markdown management. Group chief executive Brent Scrimshaw had set that up in February as "optimising the balance between sales and gross margin while actively managing our inventory".
By May he was describing the quarter as "balancing sales execution and gross margin expansion together with operational and cost discipline", supported by a cost-out program tracking to NZ$27.5 million.
Momentum did cool into winter, with direct-to-consumer same-store sales up 4.8 per cent in constant currency across the 24 weeks to 19 July while Rip Curl went backwards 2.8 per cent. KMD Brands reports its full year on 23 September, alongside the conclusion of a board-initiated business review.
Myer's year is best read through the shift in its own language. In March, executive chair Olivia Wirth credited "disciplined cost management" for allowing targeted investment across ecommerce, marketing and supply chain, on first-half sales of $2.28 billion and underlying net profit of $51.7 million.
By late July the framing had moved. Wirth described a second half defined by "a volatile and significantly more challenging macroeconomic and retail environment", citing three interest rate rises in the calendar year, fuel costs tied to the Middle East conflict and a warmer than average start to winter.
The numbers track it. Full-year sales of $4.089 billion read as 11.3 per cent growth on an actual basis and 0.3 per cent pro forma, with operating gross profit margin slipping to about 39.2 per cent from 40.3.
Myer was explicit about the cause, attributing the slide to higher than planned promotional activity run to stimulate demand. MYER one now carries a record 5.3 million active members, and the audited result lands this month with the impairment question still open.
David Jones has no ASX obligation and released what it chose to. Its nine-month update to March showed EBITDA up 325 per cent to $51.6 million, sales up 3.6 per cent and cost of doing business down 5.6 per cent.
That performance "evidences the successful completion of our $250 million Vision 2025+ strategy", then chief executive Scott Fyfe said.
The useful context is the $95.5 million pre-tax loss the year before. In June, Fyfe departed and Erica Berchtold became the first female chief executive in the company's 188-year history, saying the recent refinancing "allows us to stabilise and reset the business" under a five-year plan called INSPIRE30.
Zara is the control in all this. Inditex Australia is neither restructuring nor discounting its way anywhere and it files without commentary of any kind.
Revenue rose 2.3 per cent to $410.3 million in the year to 31 January while cost of sales rose 5.3 per cent, holding gross profit flat and pulling margin down 1.28 percentage points to 54.81 per cent. From there the operating leverage runs the wrong way, with operating profit down 19 per cent and total profit down 25 per cent to $19.14 million.
The Australian arm still paid a $34 million dividend up to its Dutch parent, more than the year's profit. Volume held. The economics did not.
Read together, the round says demand did not collapse — the cost of chasing it rose. Country Road, David Jones and Kathmandu all improved off restructuring rather than trading conditions, while Accent and Myer, both mid-transformation, absorbed the hit instead.
None of the conditions behind that second half have cleared. The cash rate sits at 4.35 per cent after three increases since February, trimmed mean inflation is holding at 3.6 per cent and the market is split on the 29 September decision. Retailers head into the run from Black Friday to Boxing Day with demand largely intact and less margin to defend it with.