Accent (ASX:AX1) stock price rises 6% despite ‘severely impacted’ first-half results


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the Accent Group Ltd. (ASX:AX1) stock price is rising today. This comes after the company released its half-year results for fiscal 2022 late afternoon yesterday.

As of this writing, Accent shares are up 6.25% to $2.04.

Below, we take a closer look at the footwear retailer’s performance for the period.

Accent delivers mixed results for the first half of FY22

Accent’s stock price is moving following the company’s results for the six months ended December 26, 2021. Here are some of the key highlights:

What happened in the first half of FY22 for Accent?

Trading for the semester was significantly impacted by the ongoing COVID-related disruptions and lockdowns in Australia and New Zealand. From July to October, more than 55% of the Group’s stores (representing 400 of the 700 stores) had to close due to the containment measures imposed by the government.

Despite these challenges, the group achieved total sales of $594 million, up 9.7% from the previous year. Net income after tax was $14.8 million, driven by its omnichannel operating model, coupled with the continued focus on VIP, vertical and virtual.

Online sales climbed 47.9% from the first half of FY21 to $159.8 million, accounting for 31.2% of total group retail sales. This was supported by the group’s investment in new websites, loyalty programs and customer data.

Retail sales held accounted for the bulk of profits, up 7.7% from a year earlier to $443.3 million. Management estimated that the impact of COVID-related lockdowns and disruptions on owned retail sales would be at least $95 million.

Additionally, Accent opened 104 new stores during the year and closed 4 stores when rent could not be paid. A total of 738 stores operate in Australia and New Zealand.

What did management say?

Accent Group CEO Daniel Agostinelli addressed the result, saying:

Trade in the first half of the year was severely impacted by the COVID-related disruptions and lockdowns that occurred in Australia and New Zealand…

In this context, I am satisfied with the results obtained as well as the continuous progress of the group in relation to the objectives of its growth plan.

The continued focus on VIP (our loyal customers), verticals and virtual, as well as our integrated digital and store operating model, has enabled the group to increase online sales, continue to grow its customer database and its loyalty programs and to trade successfully through our inventory.

Key achievements for the semester include opening 104 new stores, growing our customer base by an additional 600,000 customers, signing a 10-year distribution agreement for Reebok and continuing to grow our key activity.

What’s next for Accent?

In the first eight weeks of H2 FY22, Accent said commerce was significantly impacted by reduced customer traffic due to COVID-19.

Like-for-like (LFL) sales over the past two months were down 10% from a year earlier.

Looking at the first four weeks of 2022 (through January 23), LFL sales fell 19.1% in the first half of FY21.

On a positive note, LFL sales for the four weeks from January 24 to February 20 improved significantly. This brings them back to last year’s performance.

Following the post-Christmas sales period, Accent drove pricing, margin sales and gross margin in the first eight weeks. So far, this is in line with expectations and ahead of the previous year.

Although the uncertain business environment related to COVID-19 is unknown, the company remains cautious on the short-term outlook. As such, it did not provide guidance on sales or earnings for the second half and full fiscal year of FY22.


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