Accent Group (ASX:AX1) has a lot to prove in the next twelve months. This is according to investor analysts at Jarden, who are not as excited about the recent trading update from the Australian footwear conglomerate.
Jarden has set its rating on Accent's stock (ASX: AX1) to neutral following its trading update on August 22, with a 12-month target price of $1.46. The group's share price is currently at $1.41. This is down from its recent peak of $1.66 immediately prior to its FY25 trading update, where the share price plunged to as low as $1.37 in one day.
In a note to investors, Jarden analysts confirmed it is waiting for improving operating conditions or signs of success in the company's Sports Direct rollout after signing a ten-year deal with the sporting retailer's UK-based parent company Frasers Group. The company also manages 30 other brands, including Platypus, Hoka and The Athlete's Foot.
This comes after Accent Group reported a soft total sales lift of 0.2 per cent to $1.62 billion in FY25, with its earnings before interest and tax (EBIT) down by around $200,000 to $110.2 million.
According to Jarden analysts, Accent’s guidance for FY26 – where it is currently targeting high single-digit EBIT growth for this financial year – supports their view that the company continues to face a challenging promotional environment.
The analysts told investors that industry feedback and comparative read-throughs have led to its stance, highlighting that Nike flagged significant promotional intensity in March 2025 and ongoing clearance activity in June 2025, while JD Sports downgraded guidance in January 2025 and in May 2025 noted there was more product in outlet channels and some retailers were discounting online.
“We now wait for the core business of AX1 to see an improvement in operating environment as interest rate cuts start to flow through and the sustained promotional intensity begins to normalise,” the analysts wrote.
“While we still consider AX1 to be a high quality retailer with strong management, long-term growth opportunities, and potential upside from Sports Direct, we wait for more evidence that AX1 can execute efficiently on Sports Direct or interest rate cuts can improve the demand and/or promotional environment (in which case there may be significant potential upside risk given the derating AX1 has recently experienced).”
But not all industry reviewers are this rigid. Analysts at investment bank Petra Capital recently upgraded their rating on Accent Group stock to ‘buy’ following its results.
In its note to investors, Petra Capital analysts noted five key reasons why they have a more positive outlook for the apparel and footwear conglomerate. This includes an improvement in like-for-like trend in lifestyle footwear, with Accent’s lifestyle banners recording a 0.8 per cent LFL lift for the first seven weeks of FY26. This was cycling a “tough” comp of 3.5 per cent in the same time last year.
In its trading update late last week, Accent reported some early signs that its lifestyle banners, including Platypus and Skechers, are back to growth, with sports and performance banners continuing to grow. “We have a strong pipeline of committed wholesale orders,” the company reported.
The analysts also noted there should be better comps emerging post-AGM for Accent, particularly on like-for-like sales and gross margin percentage. According to Petra Capital, this bodes well for momentum into Christmas.
The third reason for a more positive outlook is the rebasing down of market expectations, with analysts claiming consensus for FY26e EBIT was too high.
According to the footwear group, its FY26 EBIT target of a “high single digit” rise is based on achieving low single digit LFL sales growth, as well as growth from new and annualising stores, incremental profit from The Athlete’s Foot franchise acquisition program, new distributed brands and continued growth in Hoka and Nude Lucy.
Accent added that gross margin percentage and cost-of-doing-business percentage are planned to be broadly flat to FY25, and noted that the full projection includes the impact of start-up costs for Sports Direct.
“It is unusual for AX1 to provide guidance this early in the new year, but we believe they felt obliged to reset market expectations,” Petra analysts noted. The analysts added that this guidance implies Accent’s first half FY26 EBIT of $80 million, and FY26 EBIT in the region of $118 million.
“Whilst this was above PCe, consensus was sitting too high at ~$126m. We believe the key delta was consensus did not adequately account for the upfront investment needed to launch Sports Direct.”
Petra analysts also noted the share price pull-back in Accent stock off the back of its announcement also gives a positive outlook. AX1’s share price dropped from a recent high of $1.66 to $1.40 on the morning of its trading update on Friday, August 22. The group’s share price dipped further to a low of $1.37 by Friday afternoon.
Petra’s target price is set at $1.65, with Accent’s share price nudging up to $1.49 on Monday afternoon.
The icing on the cake for Accent is that the Sports Direct rollout is on track, with at least four stores set to open in FY26. The first store is set to open at Fountain Gate, Victoria in November. All this matches Petra’s forecasts.
“AX1’s decision to provide this guidance early in FY26 lifts our confidence management has a good line of sight of new sites (extending into 1H27) secured/in advance negotiations.”
Jarden analysts swooped back in to say that while Accent Group delivered a “robust” trading update, they noted that the group’s EBIT for FY25 was down 0.5 per cent when taking into account $3.3 million of non-recurring items.
According to Accent's annual report, this relates to the reversal of a historical impairment of the Hype DC brand carrying value of $9.7 million, the impairment of a number of underperforming Vans stores of $3.8 million and one-off costs and trading losses of $2.6 million relating to the discontinuation of the CAT brand distribution and the divestment of The Trybe.
Jarden analysts also noted that Accent’s FY26 EBIT guidance implies downgrades to Visual Alpha consensus, which expects Accent’s FY26 earnings to hit around $122.1 million. This would require around 11 per cent growth.
“Compositionally, [the guidance] was broadly in line with JARDe/VA Cons, with FY25 GPMs (54.9%) a key talking point, -85bps as AX1 continues to be impacted by the ongoing promotional environment,” Jarden analysts noted.
“AX1 guided for GPMs and CODB as a percentage of sales (inc. Sports Direct investment) to remain flat y/y, while factoring in (among other areas) low single digit LFLs growth on a comp base that gets easier over the course of the year relative to the trading update.”
Moreover, the analysts also spotlighted Accent’s store rollout, which hit 892 stores at the end of FY25. This is below the consensus of 909.
Jarden analysts note this makes the FY26 consensus of 945 harder to achieve, given AX1 guided to at least 30 gross new stores.