Accent Group has delivered another record result - this time for the first half of the fiscal year. 

The footwear group has reported net profit after tax of $35.3 million, a 9.7% increase on the previous year.

The business' EBITDA grew by 10.5% to $67.7 million while group sales in company owned stores increased 14.1% to $444.2 million. 

Like-for-like retail sales for the first seven weeks of the second half are already up 3%.

Accent Group CEO Daniel Agostinelli said it would continue to avoid industry-wide discounting.

“The management team remain focused on continued innovation, execution of the growth plan, and trading the business to respond to market conditions."

"Sustainable underlying margin improvement remains a key focus, including avoiding lazy, discount-driven retailing, increasing vertical brand and product mix and driving operating efficiencies.

"Accent Group continues to be defined by strong cash conversion, and the consistent strong returns it delivers on shareholders’ funds."

Profit in the second half is expected to be achieved through revenue growth, driven by low single digit LFL growth and at least 70 new stores.

Accent attributed its first half results to strong eCommerce and store sales, profit growth in The Athletes Foot, underlying gross margin improvement and a focus on cost of doing business.

Agostinelli said although the headline gross margin was below the prior year, it had fared well given conditions.

This included foreign exchange headwinds and more significantly, the highly competitive market environment driven by the Cyber events in November.

The gross margin impact to EBIT margin was largely offset by improvements in cost of doing business.

Accent Group CEO Daniel Agostinelli said that the business is pleased with the results given the challenging conditions.

"We are pleased to have delivered strong sales and earnings growth in a challenging environment.

"The strength of the Group’s digitally integrated business model, along with the ongoing focus and investment on innovation in digital and store formats, continues to drive growth.

"I would also like to acknowledge the hardship and community impact caused by the bushfires over the last several months and to thank our team and our customers in affected communities for their efforts and resilience through this difficult time," he said. 

In the half Accent Group opened 51 new stores across Australia and New Zealand, with 26 of these opened in November and December. 

The business also closed eight stores upon lease expiry because an agreement with landlords for forward sustainable rents could not be reached. 

In 2020 Accent expects to open more than 70 new stores. 

In terms of strong performers in the retail portfolio, Accent reports that Skechers, Vans, Dr Martens, Platypus, Cat and Subtype were standouts. 

The Hype brand remains a continued focus for the Group, with Accent undertaking significant refurbishing work and improving product and brand differentiation in this business.  

Accent will continue to invest in The Athlete's Foot brand, with a further 17 stores added during the half to bring the store network to 66 stores. 

The Athlete's Foot sales and margin were ahead of last year on like for like and total stores basis, with particularly strong sales coming in January for back to school. 

Accent Group chairman David Gordon said that the growth in stores helped to deliver strong results. 

"The Group continues to invest in future growth including stores, digital and new incubation businesses in footwear and the high growth athleisure segment through the Stylerunner acquisition.

"The continued strong profit growth, cash position and confidence in the growth strategy have enabled the Board to declare a fully franked interim dividend of 5.25 cents per share," he said. 

Digitally, Accent's sales grew 33% during the half, on top of the 94% growth achieved in H1 FY19. 

This growth is underpinned by Accent's investment in the digital customer experience with a focus on customer communications. 

This investment results in a dual benefit for Accent by giving the customers direct, personalised communications while also reducing the reliance and cost on paid search channels.

In its wholesale business, Accent reports sales up 6.7% to $62.2 million, with strong performances from Skechers, Vans, Merrell and Timberland.

Recently acquired businesses also performed well, with The Trybe, Cremm and Sylerunner all reported to be on track. 

In a statement Accent said that these businesses are all performing well, despite being newly launched in H1.

"As they were all in start-up phase in H1, the EBIT impact of these businesses for the half was a planned combined loss of c$1m.

"The Trybe continues to show positive results with trade through the key Christmas and back to school trading periods in line with plan.

"Cremm soft launched just prior to Christmas and the key focus here for the next quarter is onboarding new brand partners and widening the product portfolio.

"The Subtype business, which we have now owned for 12 months, was ahead of plan and contributed positively to EBIT.

"Planning for the launch of Pivot is well progressed and on track for our first store to open in Shellharbour (NSW) in April 2020."

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