Accent Earnings: Margin Slippage Defensible Given Market Share Gains

Narrow-moat Accent's first-half fiscal 2025 result met guidance, with like-for-like sales up 3% on last year and EBIT up 12% to AUD 81 million. A trading update for the first seven weeks of the second half showed like-for-like sales growth had slowed a touch, to 2%. However, we expect conditions to pick up in the final months of the fiscal year due to tax cuts, RBA cash rate relief, and ongoing strength across the labor market. We maintain our full-year like-for-like sales growth forecast of 4%. Our earnings forecasts are unchanged, and our fair value estimate lifts 4% to AUD 2.50 due to the time value of money. Shares look moderately undervalued.