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Highlights
- Accent shares dip following cautious FY25 earnings outlook
- Lifestyle footwear market slowdown weighs on performance
- Gross margin under pressure amid soft retail trends
Shares of Accent Group (ASX:AX1), a major player in Australia’s lifestyle footwear and apparel retail scene, came under significant pressure after the company released a subdued earnings outlook for the 2025 financial year. The group cited ongoing challenges in consumer demand and market conditions as key headwinds influencing its financial performance.
As of 10:40am AEST, the stock had dropped nearly 20% to $1.44, following Thursday evening’s announcement. The company forecasted its full-year earnings before interest and tax (EBIT) to fall within a range of $108 million to $110 million. This represents a marginal decline from FY24, which closed with EBIT at $110.4 million.
Accent revealed that like-for-like sales across its network were down 1% over the 23 weeks ending 8 June 2025. The drop was even sharper between weeks 8 and 23, with sales down 2.5% in that period. In addition, the group’s gross margin shrank by 80 basis points compared to the same period in FY24, reflecting increased pricing and promotional pressures.
The company attributed the performance drag to a challenging trading environment in the second half of the financial year, notably from March to early June. Sluggish demand in the broader lifestyle footwear market impacted both retail and wholesale sales channels, with consumers showing more caution in discretionary spending.
While Accent remains a prominent brand across Australia and New Zealand with a strong footprint in both retail stores and digital platforms, the latest update underscores the uncertainty facing consumer-focused businesses. In particular, sectors tied to lifestyle and fashion retail are encountering headwinds from changing spending habits, inflationary pressures, and a more conservative economic backdrop.
Despite these conditions, the company continues to navigate the landscape by adjusting its inventory and margin strategies, and leveraging brand partnerships to sustain long-term momentum. However, for the current financial year, the group has flagged that growth in earnings may remain flat or slightly lower, reflecting the softness seen in the market so far.
As FY25 unfolds, investor attention will likely remain fixed on any signs of sales recovery or margin stability, especially as the business approaches the key retail months of late winter and spring.
