Australian footwear conglomerate Accent Group is projecting its earnings before interest and tax (EBIT) for the first half of FY25 to be around $80 million.
This is up from $72.4 million recorded in the first half of FY24.
Despite the stronghold on earnings, the group’s gross margin is being impacted by a promotional trading environment, down 100 basis points against the prior year.
Accent Group manages over 30 brands across Australia and New Zealand, including Nude Lucy, The Athlete’s Foot, Hoka and Glue Store.
According to Accent, the EBIT forecast includes a positive net impact of $3.3 million relating to non-recurring items.
The margin pressure also comes despite a lift in total group owned sales - including wholesale sales - which were up 4.6 per cent in the first half of FY25.
Like-for-like retail sales were up 2.9 per cent in the same period, and were up 1.8 per cent between weeks 21 to 26 following the AGM update.
“Sales for the final six weeks of H1 including Cyber weekend, whilst growing on the prior year, slowed compared to the previous 20 weeks with customers responding to value offers in the market,” group CEO Daniel Agostinelli said.
“The promotional environment continued to impact Gross Margin % through this period. Both costs and inventory were well controlled with overall inventory aging clean and levels in line with plan.”
Accent Group also confirmed that it remains in active discussions with Frasers Group, adding that progress has been made on the documentation of a long-term strategic agreement.
Accent expects to conclude negotiations during the second half of FY25.
These negotiations come after now-former stakeholder Brett Blundy sold his 14.65 per cent stake in the company to Frasers, a UK sporting retail business that manages Sports Direct.
Industry insiders expect Frasers to roll out Sports Direct in the Australian and New Zealand market, with help from Accent Group.