Australian fashion and footwear conglomerate Accent Group has reported flat sales for the first 19 weeks of FY24.
Total group owned sales - which includes wholesale sales - are up 2.1% against the same time last year. Like-for-like sales are down 2.0%.
Accent Group’s FY24 gross margin percentage is reportedly broadly in line with the comparable period last year.
Citing inflationary pressures on costs and weaker like-for-like sales, Accent Group reported its cost of doing business (CODB) percentage to sales to the end of week 19 is higher than the prior year.
“Retail sales for the first 19 weeks have continued to be broadly in line with the -1.8% LFL experienced in the first 7 weeks,” Group CEO Daniel Agostinelli said. “Wholesale sales have been more challenging, reflecting softer demand from other retailers.
“Our new store opening program is on track and we now expect to open 70 new stores in H1 FY24, with many of them opening across November and December.
“The Group’s in-stock position along with sales and operational plans are well set heading into the three most important trading months of the year.”
During FY23, Accent Group opened 80 new stores, including 20 Platypus stores, 18 Skechers stores and 22 Nude Lucy stores.
Agostinelli said the company also transitioned 15 stores and closed 21 due to closed banners or where sustainable renewal terms could not be achieved.
Meanwhile, wholesale sales continued to grow across Accent Group, driven by existing and new distributed brands.
“In particular, we are pleased with the performance of Hoka and UGG, and indeed we have opened 8 stores across both brands to date, all trading well.
“Sales of vertical-owned brands and products grew by 40% to more than $100 million and will continue to support the improvement in underlying gross margin.
“For FY24, we will be focussing on continued roll-out of new stores, improved underlying gross margin from our ‘moat’ brands (being our distributed and vertically owned brands), growth in Nude Lucy, operational improvement in Glue Store and Stylerunner, profit growth from The Athlete’s Foot and continued growth in digital sales.”
Across digital sales, Agostinelli said they have increased by more than three times in the last four years. He said it was expected online sales would fall back in FY23 following store disruptions in FY22, but Accent Group reported growth this year.
“In FY23, the mix of online sales at 19.1% has nearly doubled from 10.2% in FY19,” Agostinelli said. “The focus for online over the FY23 period was on achieving profitable sales through improved gross margin and lower costs in digital marketing and distribution.
"We continued to invest in new and upgraded websites and underlying digital infrastructure, with 11 websites opened or upgraded during the year.
“As Accent Group is a fully integrated omnichannel retailer, moving forward, we will move away from separate disclosures on digital performance given that they are integrally linked with overall retail sales.”
The company advises that the first half of FY24 is a 26-week reporting period ending December 31, 2023, compared to the 27-week reporting period that ended January 1, 2023 in H1 FY23.