AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Accent (AX1) updates on challenging retail conditions
- Sales and margins face pressure amid low consumer demand
- FY25 profit outlook revised amid persistent headwinds
The retail outlook for Accent Group Ltd (ASX:AX1) is under a cloud after the company released a weaker-than-expected trading update, spotlighting persistent challenges in the lifestyle footwear market. As the operator behind well-known brands such as The Athlete’s Foot, Platypus, and Stylerunner, and the Australian distributor for global names including Vans, Skechers, and Hoka, Accent’s performance is closely watched by the market.
Difficult Trading Conditions Weigh on Sales
Accent highlighted that the second half of FY25 has continued to be marked by difficult trading conditions. The broader lifestyle footwear category has experienced minimal growth from March through early June 2025, which has affected sales across both retail and wholesale divisions.
Additionally, the business continues to operate in a promotional-heavy environment. This has made it necessary to apply disciplined inventory management to avoid overstocking, especially amid subdued consumer demand. However, this tactic, while prudent for long-term positioning, has also placed downward pressure on gross profit margins.
For the 23-week period ending 8 June 2025, like-for-like (LFL) sales, which exclude revenue from newly opened stores, declined by 1%. The results were even softer for the more recent portion of that window, with LFL sales down 2.5% for the final two weeks.
Profit Margins and Earnings Outlook Decline
The company also reported that its gross profit margin for the second half of FY25 so far has slipped by around 80 basis points compared to the same time last year. This contraction in profitability reflects the competitive retail landscape and promotional discounting needed to stimulate sales.
Management has now revised its full-year earnings expectations, forecasting earnings before interest and tax (EBIT) in the range of $108 million to $111 million for the financial year ending 29 June 2025.
Industry Sentiment and Path Forward
Retailers like Accent (AX1), which depend heavily on consumer sentiment and discretionary spending, are often more vulnerable during periods of economic uncertainty. In such environments, pressure on margins and sales volumes can test operational resilience.
While these challenging phases are not uncommon in cyclical sectors, the key for companies like Accent lies in their ability to manage costs, retain brand strength, and position themselves to rebound when market conditions improve. Market participants will likely monitor how Accent navigates this environment and positions itself heading into FY26.
