Accent Group is driving full-price, full-margin sales in the new financial year in a bid to drive cost efficiency and gross margin improvement.
It comes after heavy promotional tactics and the clearance of discontinued brands in the latter half of FY23, with Accent’s gross margin hitting 55.2% by year-end, up 100 basis points.
Total sales for the footwear group for the first seven weeks of FY24 are up 2.8% to last year. Total retail sales are up 5%.
Like-for-like (LFL) retail sales are down 1.8%, with LFL retail sales in the first seven weeks of FY23 up 18.9%
Accent Group reported an improvement in August trade, with LFL sales in the month to date up 1%.
Digital sales for the first seven weeks are up more than 20% to last year.
The focus on full price sales has impacted LFL sales, Accent Group reported, while gross margin percentage over this period remains at a similar level to the strong margin rate achieved in the first seven weeks of FY23.
“We recognise that there is ongoing uncertainty in the economic outlook, and like others we have experienced softening sales across May and June and into the first 7 weeks of this year, with apparel being softer than footwear,” Accent Group CEO Daniel Agostinelli said.
“We continue to be pleased with the trading strength in a number of our banners where lower prior year comps and product innovation have driven positive LFL retail growth.”
Agostinelli said the Accent team is focused on its FY24 plan to drive new product innovation, tight management of inventory leveraging clean stock levels coming out of FY23, and opening at least 50 new stores.
“Our portfolio of global distributed brands, owned vertical brands, integrated digital capability and large store network are core assets of the Group and position the Company well for growth into the future.”
For FY23, Accent Group’s total sales grew by 24% on FY23 to $1.57 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) is up 39.6% on last year to $298.2 million, while EBIT is up 122.9% to $138.8 million.
The company’s net profit after tax (NPAT) nearly tripled to $88.7 million from $31.5 million recorded in FY22.
Accent Group’s total owned sales, excluding The Athlete’s Foot franchise sales, hit $1.39 billion up 26.3% to prior year. Online sales contributed 19.1% of the total retail sales, hitting $260.5 million.
Meanwhile, LFL retail sales was up 2.2% to 10.2% in FY23.
Accent Group confirmed that sales softened in May and June, but Skechers, The Athlete’s Foot and Hype DC continued to experience positive trading comp store sales growth.
The group opened 80 new stores during the year, transitioned 15 stores from discontinued into continuing brands and closed 21 stores where required rent outcomes could not be achieved. Among this, 22 Nude Lucy stores were opened over the last 18 months.
Total store numbers (including websites) sit at 821.